You neighbor friend Ann and you attend the MBA Program in Professional Accounting. Both of you live a few blocks apart, and have the same course schedule. You offer her daily ride in your car to school. Ann offers to share in the cost. You incur the following costs: Depreciation Amortization Insurance Gasoline Tolls Parking The conversation between you two runs as follows. Ann: Thanks for offering me a ride. Its great, but please let me share in the cost. You: Forget it. Its my pleasure. I go anyway, so theres is no extra costs. Ann: Come on, I feel bad being a free rider. Lets just allocate the cost of the trips. You: Believe me Ann, even if I wanted to allocate I wouldnt know how. Ann: We are to be accountants. We should know how to fully allocate costs. You: In this case we should allocate incrementally, not fully. Ann: Now you are talking like an economist, not like an accountant. You: This is too complicated Ann. Why dont you just buy me a coffee now and then? Ann: Please, I insist on sharing. You: I already did an incremental allocation, and your perfectly fair share is zero, but I want you to feel good, so here is the deal. If you can come up with a more reasonable cost allocation, Ill go along. 1. Can you come up with a more reasonable cost allocation? 2. Discuss the implications of the above for costing business by-products or by-services.