Jenny's Cupcake Shop and Carrie's Cakes each operate a bakery close to each other in a small town in Florida. If Jenny rents ovens on her own, it will cost $36,000. If Carrie rents ovens on her own, it will cost $52,000. If they consolidate baking operations and share ovens, the total cost will be $66,000. Read the requirements. Requirements 1. Calculate Jenny's and Carrie's respective cost of the shared ovens under the stand-alone cost-allocation method. 2. Calculate Jenny's and Carrie's respective cost of the shared ovens using the incremental cost-allocation method assuming (a) Jenny is the primary party and (b) Carrie is the primary party. 3. Calculate Jenny's and Carrie's respective cost of the shared ovens using the Shapley value method. 4. Which method would you recommend Jenny and Carrie use to share the cost of the ovens? Why? х

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Jenny's Cupcake Shop and Carrie's Cakes each operate a bakery close to each other in a small town in Florida. If Jenny rents ovens
on her own, it will cost $36,000. If Carrie rents ovens on her own, it will cost $52,000. If they consolidate baking operations and
share ovens, the total cost will be $66,000.
Read the requirements.
Requirements
1.
Calculate Jenny's and Carrie's respective cost of the shared ovens under the stand-alone cost-allocation
method.
2. Calculate Jenny's and Carrie's respective cost of the shared ovens using the incremental cost-allocation method
assuming (a) Jenny is the primary party and (b) Carrie is the primary party.
3. Calculate Jenny's and Carrie's respective cost of the shared ovens using the Shapley value method.
4. Which method would you recommend Jenny and Carrie use to share the cost of the ovens? Why?
- X
Transcribed Image Text:Jenny's Cupcake Shop and Carrie's Cakes each operate a bakery close to each other in a small town in Florida. If Jenny rents ovens on her own, it will cost $36,000. If Carrie rents ovens on her own, it will cost $52,000. If they consolidate baking operations and share ovens, the total cost will be $66,000. Read the requirements. Requirements 1. Calculate Jenny's and Carrie's respective cost of the shared ovens under the stand-alone cost-allocation method. 2. Calculate Jenny's and Carrie's respective cost of the shared ovens using the incremental cost-allocation method assuming (a) Jenny is the primary party and (b) Carrie is the primary party. 3. Calculate Jenny's and Carrie's respective cost of the shared ovens using the Shapley value method. 4. Which method would you recommend Jenny and Carrie use to share the cost of the ovens? Why? - X
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Requirement 4. Which method would you recommend Jenny and Carrie use to share the cost of the ovens? Why?
I would recommend the
It is fairer than the
which
is likely more acceptable.
Given its simplicity, the
Transcribed Image Text:Requirement 4. Which method would you recommend Jenny and Carrie use to share the cost of the ovens? Why? I would recommend the It is fairer than the which is likely more acceptable. Given its simplicity, the
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