Calculating costs using traditional and ABC  Brian and Gary are college friends planning a skiing trip to Killington before the New Year. They estimated the following costs for the trip:

Estimated

 

Activity Allocation

Costs

Cost Driver

Brian Gary

Food

$550

Pounds of food eaten

24

26

Skiing

240

# of lift tickets

3

0

Lodging

320

# of nights

4

4

 

$1,110

 

 

 

Requirements

1. Brian suggests that the costs be shared equally. Calculate the amount each person would pay.

2. Gary does not like the idea because he plans to stay in the room rather than ski. Gary suggests that each type of cost be allocated to each person based on the above listed cost driver. Using the activity allocation for each person, calculate the amount that each person would pay based on his own consumption of the activity.