1. The East and West Railroad Company has two divisions, the East Division and the West Division. The company recently invested $800,000 to maintain its railroad track. Pertinent data for the two divisions are as follows:
Total Miles Traveled
East Division 800,000 miles
West Division 1,200,000 miles
What is the amount of track improvement cost that should be allocated to the West Division?
2. Joint products A and B emerge from common processing that costs $100,000 and yields 2,000 units of Product A and 1,000 units of Product B. Product A can be sold for $100 per unit. Product B can be sold for $120 per unit. How much of the joint cost will be assigned to Product A if joint costs are allocated on the basis of relative sales values?
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