Evan and David are students at Berkeley College. They share an apartment that is owned by David. David is considering subscribing to an Internet provider that has the following packages available: Evan spends most of his time on the Internet ("everything can be found online now"). David 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 $90 total package is a "win-win" situation. Requirements Package Per Month A. Internet access $ 80 B. Phone services 20 1. Allocate the $90 between Evan and David 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? C. Internet access + phone services 90 Requirement 1. Allocate the $90 between Evan and David using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. (Round your answers to the nearest cent.) Costs allocated to Evan David (a) Stand-alone 72.00 $ (b) Incremental Evan primary user David primary user (c) Shapley $ 18.00 20.00
Evan and David are students at Berkeley College. They share an apartment that is owned by David. David is considering subscribing to an Internet provider that has the following packages available: Evan spends most of his time on the Internet ("everything can be found online now"). David 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 $90 total package is a "win-win" situation. Requirements Package Per Month A. Internet access $ 80 B. Phone services 20 1. Allocate the $90 between Evan and David 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? C. Internet access + phone services 90 Requirement 1. Allocate the $90 between Evan and David using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. (Round your answers to the nearest cent.) Costs allocated to Evan David (a) Stand-alone 72.00 $ (b) Incremental Evan primary user David primary user (c) Shapley $ 18.00 20.00
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 93DC
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