The Yoga Factory is a large Yoga Studio that has operating costs of $2,000 per day. The facility is open 16 hours per day. The entire $2,000 is a fixed cost.

Yoga Factory can rent out its facility at the following prices:

Time Slot Name: Early Morning Morning Afternoon Evening

Slot hours: 6am-9am 9am-noon noon-6pm 6pm-10pm

Hours per day: 3 hours 3 hours 6 hours 4 hours

Rental Price (per hour): $10 $10 $ 50 Note#1

Rental Price (per day): $30 $30 $300 Note#1

Instead of renting out the facility, the Yoga Factory can run their own programming:

Time Slot Name: Early Morning Morning Afternoon Evening

Programming Name: Sunrise Yoga Morning Yoga Dance Yoga Evening Yoga

Additional Costs (per day): $ 49 $ 61 $ 520 $ 400

Programming Revenue (per day) $ 75 $ 401 $ 1,000 $ 1,800

(Note#1: The market rental price for the evening timeslot is unknown. Management is not interested in renting the facility to others in the evening because they prefer to run Evening Yoga).

REQUIRED:

How should the $2,000 be allocated to each time slot? (there are a few possible ways to allocate these fixed costs, and marks for this question are based on your choice of method).