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Ben and Gray are students at Berkeley college 5 ALLOCATION OF SUPPORT-DEPARTMENT COSTS, COMMON COSTS, AND REVENUES uired 1. Describe the key features of the

Ben and Gray are students at Berkeley college
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5 ALLOCATION OF SUPPORT-DEPARTMENT COSTS, COMMON COSTS, AND REVENUES uired 1. Describe the key features of the reciprocal method. 2. Allocate the support departments' costs (human resources and information systems) to the two oper- ating departments using the reciprocal method. 3. In the case presented in this exercise, which method ldirect, step-down, or reciprocall would you rec- ommend? Why? 15-23 Allocation of common costs. Ben and Gary are students at Berkeley College. They share an apart- ment that is owned by Gar. Gany is considering subscribing to an internet provider that has the following packages available: Package A. Internet accessB B. Phone services C. Internet access+ phone services Per Month $60 15 65 Ben spends most of his time on the Internet /'everything can be found online now"). Gary prefers to spend his time talking on the phone rather than using the Internet I'going online is a waste of time"1. They agree that the purchase of the $65 total package is a "win-win" situation. ao red 1. Allocate the $65 between Ben and Gary using (a) the stand-alone cost-allocation method, (b) the incre- mental cost-allocation method, and (c) the Shapley value method. 2. Which method would you rcommend they use and why? 15-24 Allocation of common costs. Sunny Gunn, a self-employed consultant near Sacramento, received irit 1 nrosnective client in Baltimore. A few days later, she received an invitation to make a

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