Question 5 (2 points)

Valdosta State University has two colleges, College of Business Administration (COBA) & College of Education (COE). The two support departments are Physical Plant & the Library. The costs incurred in each of these departments is as follows:

COBA	$ 90,000
COE	$ 70,000
Physical Plant	$120,000
Library	$ 80,000

The actual level of support is as follows:

Supplied by	Used by
	Physical Plant	Library	COBA	COE
Physical Plant		40%	35%	25%
Library	20%		50%	30%

Determine the:

Cost allocated to COBA using the direct method

Cost allocated to COBA using the step-down method (allocating Library first)

Cost allocated to COBA using the reciprocal method

Question 6 (2 points)

Trident Company produces two varieties of pine wood, A & B, from a common processing of lumber. The amount of each product produced in March 2001 is 24,000 square feet and 28,000 square feet respectively. A is a superior grade pine and sells for $6 per square foot. B sells for $5 per square foot. The additional processing costs for A & B are $48,000 and $15,000 respectively. The joint processing cost is $125,000.

Determine the following:

Joint cost allocated to each product A & B using the physical volume method, relative sales value method, and net realizable value method.

The unit cost of each product using the net realizable value method