Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed



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solutions-manual-to-bhimani-et-al-management-and-cost-accounting-pearson-2012-1
Rolf Ilse Ulrich
Stand alone Incremental Equal
€25.76 13.00 23.33
€20.09 25.00 23.33
€24.15 32.00 23.33
a
Standalone cost-allocation method.
Rolf: €32
×
€70
=
36.8% × €70

€32 + €25 + €30
=
€25.76
Ilse:
€25
×
€70
=
28.7% × €70
€32 + €25 + €30
=
€20.09
Ulrich: €30
×
€70
=
34.5% × €70

€32 + €25 + €30
=
€24.15
b
Incremental cost-allocation method. Assume Ulrich (the owner) is the primary person, Ilse the first incremental party and Rolf the second incremental party.

Party

Cost allocated
Cost remaining to be
allocated to other parties
Ulrich
Ilse
Rolf
Total
€32 25 13
€70
€38 (€70 − €32)
13 (€70 − €32 − €25)
0 This method is sure to generate disputes over the ranking of the three parties. Notice that Rolf pays only €13 despite his prime interest in the most expensive basic news package.
c
Equal sharing of the €70 amount. Rolf, Ilse and Ulrich each pay €23.33.


Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012

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