[The following information applies to the questions displayed below.] Suppose there are three passengers sharing a single cab ride and that passenger As usual fare to his destination would be $32, passenger Bs usual fare to her destination would be $18, and passenger Cs fare would be $50. Because they are sharing the cab, and assuming no surcharge, the total cab fare is $50, rather than the $100 they would have had to pay in total individually. So there is a $50 saving to sharing the cab. References Section Break Exercises 18-36 (Algo) Cost Allocation; Sharing Cab Fare [LO 18-3] Part 1 (Algo) Required:

1. Assume the passengers decide to split the $50 savings based on the relative proportion of how much each passenger would have paid individually if they had not shared the cab. How much will each passenger pay? $ $ $

Passenger A:

Passenger B:

Passenger C:

2. Assume, instead, that the passengers decide to split the cab fare so that each passenger saves the same absolute amount of money. How much will each passenger pay?

Passenger A:

Passenger B:

Passenger C: