Rolf, Ilse and Ulrich are members of the Frankfurt Fire Brigade. They share an apartment that has
Question:
Rolf, Ilse and Ulrich are members of the Frankfurt Fire Brigade. They share an apartment that has a lounge with the latest wide-screen TV. Ulrich owns the apartment, its furniture and the wide-screen TV. He can subscribe to a cable television company that has the following packages available:
Rolf is a TV news addict, has average interest in movies and no interest in sport (‘they are overpaid dummies’). Ilse is a movie buff, likes sport and avoids the news (‘it’s all depressing anyway’). Ulrich is a sports fan, has average interest in news and no interest in movies (‘I always fall asleep before the end’). They all agree that the purchase of the €70 total package is a ‘win-win-win’ situation.
Each works on a different eight-hour shift at the fire station, so conflicts in viewing are minimal.
Required 1 What criteria might be used to guide the choice about how to allocate the €70 monthly cable fee among Rolf, Ilse and Ulrich?
2 Outline two methods of allocating the €70 among Rolf, Ilse and Ulrich.
Step by Step Answer:
Management And Cost Accounting
ISBN: 9781292436029
8th Edition
Authors: Alnoor Bhimani, Srikant Datar, Charles Horngren, Madhav Rajan