John Wilkes, 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.

Wilkes 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:

Miami to San Francisco	$450
Miami to Chicago	$300

Wilkes paid $600 for his three-leg flight (MiamiSan Francisco, San FranciscoChicago, ChicagoMiami).

Required

1. How should Wilkes allocate the $600 airfare between the clients in San Francisco and Chicago 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 Wilkes use and why?