(Physical and sales value allocations) Bright Academy runs two night programs for adults. During 1998, the following operating data were generated:

The general ledger accounts show $38,500 for direct instructional costs and $5,500 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 method.

c. Make a case for each allocation method required above.LO1 

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Class hours taught Hourly tuition HOME MANAGEMENT CAREER ENHANCEMENT 5,000 $5 3,000 $12