Question
Stand-alone revenue allocation, Funland is an amusement park complex in southern Florida. Funland is divided into three autonomous divisions: a water park, a superhero theme
Stand-alone revenue allocation, Funland is an amusement park complex in southern Florida. Funland is divided into three autonomous divisions: a water park, a superhero theme park with rides, and an animal park. In addition to selling a daily entrance ticket for each park, Funland has decided to sell a three day ticket that would allow entrance into each of the parks for one day. The ticket selling price and the costs associated with each entrant into a park are:
Park | Ticket Price | Daily Cost Per Entrant |
Water Park | $40 | $15 |
Superhero Theme Park | $60 | $25 |
Animal Park | $20 | $10 |
Three-day ticket | $90 |
1. Allocate the revenue from the three-day ticket to each park using the stand-alone method based on ticket price.
2. Allocate the revenue from the three-day ticket to each park using the stand-alone method based on cost per entrant.
3. Allocate the revenue from the three-day ticket to each park using the stand-alone method based on physical units (that is, number of tickets received for each park).
4. Which basis of allocation makes the most sense in this situation? Explain your answer.
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