Allocations of Sunk Capacity Costs and Joint Costs in a Linear Principal-Agent Model.

Thomas Hemmer

doi:10.2308/tar-9608042315

July 1, 1996The Accounting Review

Allocations of Sunk Capacity Costs and Joint Costs in a Linear Principal-Agent Model.

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Key Points

This research explores the allocation of sunk capacity costs and joint costs within a principal-agent framework.
Examined risk-sharing and incentive trade-offs
Analyzed optimal capacity cost allocation based on budgeted volume
Reviewed prior research on capacity cost allocation
Identified key insights into the relationship between cost allocation and incentives
Demonstrated implications for risk-sharing in capacity management

Implication

Examines how optimal capacity cost allocation impacts incentives and risk-sharing in a linear model.

Abstract

Examines the allocation of sunk capacity costs and joint costs. Trade-off between risk-sharing and incentives; Optimal capacity cost allocation as a function of budgeted volume; Previous research on capacity cost allocation; Insights from principal-agent theory.

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Cite This Study

Thomas Hemmer (1996) studied this question.

synapsesocial.com/papers/69b606ea83145bc643d1d4fd https://doi.org/10.2308/tar-9608042315

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Allocations of Sunk Capacity Costs and Joint Costs in a Linear Principal-Agent Model.

Key Points

Implication

Abstract

Discussion

Cite This Study

Allocations of Sunk Capacity Costs and Joint Costs in a Linear Principal-Agent Model.

Key Points

Implication

Abstract

Discussion

Cite This Study

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