Complete MPP
cost
Sum of ALL
Separable costs
Total JOINT
COSTS
Complete MPP
cost – Cost
without user X
For each
user X
Separable cost
for user X
Justifiable cost
= the lesser of
Benefits or least
cost alternative
Separable costs
(RJCX)
Remaining
Justifiable cost
(TRJCX) TOTAL
of Remaining
Justifiable cost
PERCENTAGE
RJCX / TRJCX
x 100%
Compute
PERCENTAGE
PERCENTAGE
Total JOINT
COSTS
ALLOCATED
Joint Cost
SEPARABLE
COST
ADD UP
ALLOCATED
Joint Cost
TOTAL
ALLOCATED
COST
= Complete
MPP Cost
User A
User B
User X
ADD UP
+
=
=
=
=
=
=
x
-
-
=
Fig. 19.1 Cost allocation method
550
19 Cost Allocation for Infrastructure Implementation