Requirements 1. Allocate the $ 65$65 between MikeMike and BrettBrett using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. 2. Which method would you recommend they use and why?
Requirements 1. Allocate the $ 65$65 between MikeMike and BrettBrett using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. 2. Which method would you recommend they use and why?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
100%
Mike
and
BrettBrett
are students at Berkeley College. They share an apartment that is owned by
BrettBrett.
BrettBrett
is considering subscribing to an Internet provider that has the following packages available:|
Package
|
Per Month
|
|---|---|
|
A. Internet access
|
$60
|
|
B. Phone services
|
15
|
|
C. Internet access + phone services
|
65
|
...
Question content area top right
Part 1
MikeMike
spends most of his time on the Internet ("everything can be found online now").
BrettBrett
prefers to spend his time talking on the phone rather than using the Internet ("going online is a waste of time"). They agree that the purchase of the
$ 65$65
total package is a
"win dash win""win–win"
situation.Requirements
|
1.
|
Allocate the
$ 65$65
between
MikeMike
and
BrettBrett
using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. |
|
2.
|
Which method would you recommend they use and why?
|
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