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Jenny's Cupcake Shop and Carrie's Cakes each operate a bakery close to each other in a small town in Florida. If Jenny rents ovens on
Jenny's Cupcake Shop and Carrie's Cakes each operate a bakery close to each other in a small town in Florida. If Jenny rents ovens on her own, it will cost $46,000. If Carrie rents ovens on her own, it will cost $66,000. If they consolidate baking operations and share ovens, the total cost will be $84,000. Read the fequirements Requirement 1. Calculate Jenny's and Carrie's respective cost of the shared ovens under the stand-alone cost-allocation method. Jenny Carrie Stand-alone Requirement 2. Calculate Jenny's and Carrie's respective cost of the shared ovens using the incremental cost-allocation method assuming (a) Jenny is the primary party and (b) Carrie is the primary party. Jenny Carrie Incremental Jenny primary user Carrie primary user Requirement 3. Calculate Jenny's and Carrie's respective cost of the shared ovens using the Shapley value method. Jenny Carrie Shapley Requirement 4. Which method would you recommend Jenny and Carrie use to share the cost of the ovens? Why? I would recommend the It is fairer than the which Given its simplicity, the is likely more acceptable
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