Under the stand-alone method of allocating common costs
A)a ranking is used to allocate costs among the users.
B)disputes can arise over who is the primary user.
C)each party bears a proportionate share of the total costs in relation to their individual stand-alone costs.
D)an incentive is created to be the first-ranked user.
E)the parties are interested in being viewed as primary users.

Question

Quizplus · Accepted Answer

Under the stand-alone method, each party bears a proportionate share of the total costs in relation to their individual stand-alone costs, which ensures fairness in allocating common costs. A ranking is not used, and disputes over who is the primary user or incentives to be the first-ranked user are eliminated. While parties may still be interested in being viewed as primary users, this does not impact the allocation of costs.

Under the Stand-Alone Method of Allocating Common Costs