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Part $1$

Distinguish between two methods of allocating common costs.

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Part $1$

A$.$

$1.$ The$$ stand$-$alone cost allocation method uses information pertaining to each user of a cost object as a separate entity to determine the cost allocation weights. $2.$ The fixed cost allocation method where only the fixed costs are included in the cost allocation.

B$.$

$1.$ The$$ stand$-$alone cost allocation method uses information pertaining to each user of a cost object as a separate entity to determine the cost allocation weights. $2.$ The incremental cost allocation method ranks the individual users of a cost object in the order of users most responsible for the common costs and then uses this ranking to allocate costs among those users.

C$.$

$1.$ The Shapley Value method calculates an average cost based on the costs allocated to each user as first the primary$$ user, the$$ second$-$ranked user, the$$ third$-$ranked user, and so on$.2.$ The variable$$ cost$-$allocation method where only the variable costs are included in the cost allocation.

D$.$

$1.$ The Shapley Value method calculates an average cost based on the costs allocated to each user as first the primary$$ user, the$$ second$-$ranked user, the$$ third$-$ranked user, and so on$.2.$ The fixed cost allocation method where only the fixed costs are included in the cost allocation.