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Gregory Gilcrest, a self-employed consultant near Miami, receives an invitation to consult with a client in San Francisco and another client in Chicago. He decides
Gregory Gilcrest, a self-employed consultant near Miami, receives an invitation to consult with a client in San Francisco and another client in Chicago. He decides to combine his visits, traveling from Miami to San Francisco, San Francisco to Chicago, and Chicago to Miami. Gilcrest wonders how he should allocate his travel costs between the two clients. He has collected the following data for regular round-trip fares with no stopovers: (Click icon to view round-trip data.) i (Click the icon to view additional data.) Read the requirements. More info Gilcrest paid $1, 150 for his three-leg flight (Miami-San Francisco, San Francisco-Chicago, Chicago-Miami). Requirement 1 a. How should Gilcrest allocate the $1, 150 airfare between the clients in San Francisco and Chicago using (a) the stand-alone cost-allocation method? (Hold all San Francisco Chicago Stand-alone Print Done b. How should Gilcrest allocate the $1, 150 airfare between the clients in San Francisco and Chicago using (b) the incremental cost-allocation method? San Francisco Chicago - X Incremental Data table San Francisco client primary user Chicago client primary user Miami to San Francisco $ 725 c. How should Gilcrest allocate the $1, 150 airfare between the clients in San Francisco and Chicago using (c) the Shapley value method? Miami to Chicago 525 San Francisco Chicago Shapley Requirement 2. Which method would you recommend Gilcrest use and why? Print Done I would recommend the The recommended method is fairer than the which V. The recommended method allocates costs in a manner that is close to the costs allocated under the but takes a more comprehensive view of the common cost allocation problem by considering
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