ABSTRACT
A problem that often arises in costing movements of
the transportation firm is how to allocate costs
among transportation movements that share these
costs. Shared costs are costs that cannot be traced
to a particular shipment or passenger. Shared costs
may be fixed or variable; or they may be common or
joint costs. The depreciation cost of a firm's
terminal, for example, is a fixed cost to be shared
among movements of the transportation firm. If two
or more shipments (or passengers) are transported in
a single vehicle from origin A to destination B,
costs such as the driver's wage and gasoline
expenses incurred by the vehicle trip are variable
costs to be shared among the shipments (or
passengers).
