Question:
(Service organization joint cost) Abrula Archery provides archery training for children and adults. During 2010, the camp had the following operating data:
|
Children
|
Adults
|
|
Training hours taught
|
4,000
|
2,000
|
|
Hourly tuition
|
$35
|
$65
|
Direct instructional costs for 2010 were $120,000; overhead costs for the two programs were $55,500. Camp owners want to know the cost of each program.
a. Determine each program's cost using a physical measure base.
b. Determine each program's cost using the sales value at split-off method.
c. Make a case for the allocation method in (a) and (b).