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The Shapley Value Method of Allocating Common Costs Considers Each

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The Shapley value method of allocating common costs considers each party as first the primary party and then the incremental party and computes an average allocation.


Definitions:

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Molding Machine

A machine used in manufacturing to shape liquid or pliable material using a rigid frame called a mold or matrix.

Straight-line Rate

A method of calculating depreciation by evenly allocating the cost of an asset over its useful life.

Double Declining-balance

An accelerated method of depreciation where the book value of an asset is reduced at double the rate of its straight-line depreciation.

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