(Physical and sales value allocations) Scott Community College runs two noncredit evening programs. During 2000, the following operating data were generated:
|
Small Business Management |
Introduction to Internet |
|
|
Class hours taught |
4,000 |
2,000 |
|
Hourly tuition |
$5 |
$15 |
The general ledger accounts show $37,000 for direct instructional costs and $5,000 for overhead associated with these two programs. The Board of Trustees wants to know the cost of each program.
a. Determine the cost of each program using a physical measurement base.
b. Determine the cost of each program using the sales value at split off method.
c. Make a case for each allocation method from parts (a) and (b).