Question 9

Under the incremental method of allocating common costs ________.

1) the parties are interested in being viewed as primary users

2) each party bears a proportionate share of the total costs in relation to their individual stand-alone costs

3) the first-incremental user bears a higher proportion of the cost in comparison with the primary user

4) the primary user bears the maximum of the total cost

Question 11

The best method to determining weights for the stand-alone revenue-allocation method is ________.

1) selling prices revenue-allocation method because the weights explicitly consider the prices customers are willing to pay for the individual products

2) unit cost revenue-allocation method because it can be used on all occasions

3) the direct revenue-allocation method since selling prices or unit costs are difficult to calculate for individual products

4) physical-units revenue-allocation method because the physical units explicitly value the prices customers are willing to pay for the individual products