Answer
- Stand-alone method: Allocates costs based on each user as a separate entity, treating them independently.
- Incremental method: Ranks users by their responsibility for common costs and allocates costs incrementally based on the number of users beyond the primary one.
- Shapley Value method: Calculates an average cost by considering costs allocated to each user in different positions, ensuring a fair distribution of costs.
Work Step by Step
The stand-alone cost-allocation method considers each user of a cost object as a separate entity to determine cost-allocation weights. It treats each user independently in the allocation process.
The incremental cost-allocation method, on the other hand, ranks users in the order of their responsibility for common costs. The primary user, ranked first, is allocated costs as a stand-alone user. Subsequent users are allocated additional costs that arise from having more users than just the primary one.
The Shapley Value method calculates an average cost by considering costs allocated to each user as the primary user, the second-ranked user, the third-ranked user, and so on. It provides a fair distribution of costs by considering the incremental contributions of each user in different positions.
