Question :
35) Roper’s Cablevision encounters revenue-allocation decisions with its bundled product : 1186076
35) Roper’s Cablevision encounters revenue-allocation decisions with its bundled product sales. Here, two or more of its services are sold as a single package. Managers at Roper’s are keenly interested in individual product-profitability figures. Information pertaining to its three bundled products and the stand-alone prices of its individual products is as follows:
Stand-Alone Sales Price
Packaged
Package Basic Sports Lifestyle TV Classics Price
Sp. & Lifestyle$20$15N/A$30
Sports & Classics20N/A$1530
All three 20151540
The unit variable costs are estimated at $4.00, $3.00, and $2.50 for Sports, Lifestyle, and TV Classics, respectively. In all cases, Sports is considered to be the primary product.
Required:
a.Allocate the bundled revenue to each product in the ‘Sports & Classics’ bundle, using selling prices as the base.
b.What is the allocated revenue to the Sports in each bundle, using the incremental revenue-allocation method?
36) Software For You encounters revenue-allocation decisions with its bundled product sales. Here, two or more units of the software are sold as a single package. Managers at Software For You are keenly interested in individual product-profitability figures. Information pertaining to its three bundled products and the stand-alone selling prices of its individual products is as follows:
Stand-Alone Selling Price
Cost
Package
Packaged
Price
Word Processing
(WP)
$125
$18
WP & SS
$220
Spreadsheet
(SS)
$150
$20
WP & AS
$280
Accounting Software
(AS)
$225
$25
All three
$380
Required:
a.Using the stand-alone revenue-allocation method, allocate the $380 packaged price of “All Three” to the three software products
1.with selling prices as the weights.
2.based on physical units.
b.Allocate the $380 packaged price of “All Three” to the three software products using the incremental revenue-allocation method. Assume Word Processing is the primary product, followed by Spreadsheet, and then Accounting Software.
37) Software For You encounters revenue-allocation decisions with its bundled product sales. Here, two or more of the programs are sold as a single package. Managers at Software For You are keenly interested in individual product-profitability figures. Information pertaining to its three bundled products and the stand-alone prices of its individual products is as follows:
Stand-Alone Sales Price
WordSpread-Accounting
Processing Sheet SoftwarePackage
Package(WP)(SS)(AS)Price
Package A$125$150N/A$220
Package B125N/A$225280
Package C125150225380
The unit inventory costs is $18, $20, and $25 for WP, SS, and AS, respectively. Assume AS is the primary product, followed by SS, then WP.
Required:
Allocate the bundle revenue to each product in Package C, using inventory unit costs as the weighting factor.
