Pricing police cost case

1. Calculate the 2015 service cost for each municipality using the new billing model. What impact does using two cost drivers (i.e. base service, calls for service (CFS)) have on the service cost for each municipality

2. Consider the impact of allocating costs based on just one cost driver. Calculate the 2015 service for each municipality using the following:

a. Properties

b. CFS

c. Population

d. Household income

e. Property value

3. After evaluating the service costs under different cost drivers, which cost allocation method seems most equitable for all municipalities? Does the new billing model seem more or less “fair” by comparison?

4. Choose one method and explain how you would justify this method individually to each township.