Question : 9) To give more weight to the product that most : 1216990

 

9) To give more weight to the product that most likely drives the sales of the bundled product, the revenue allocation should be weighted using:

A) selling prices

B) unit costs

C) physical units

D) stand-alone product revenues

 

10) The revenue allocation may be weighted using physical units when:

A) the individual products within the bundle have approximately the same value

B) selling prices are unstable and unit costs are difficult to calculate

C) other methods cannot be used for various reasons

D) All of these answers are correct.

Answer the following questions using the information below:

 

Buzz’s Educational Software Outlet sells two or more of the video games as a single package. Managers are keenly interested in individual product-profitability figures. Information pertaining to three bundled products and the stand-alone prices is as follows:

 

 

Stand-Alone Selling Price

Cost

 

Package

Packaged

Price

Reading Fun

$25

$3.60

 

1. Reading Fun & Math Fun

$44

Math Fun

$30

$4.00

 

2. Reading Fun & Analysis

$56

Analysis

$45

$5.00

 

3. All three

$76

 

11) Using the stand-alone method with selling price as the weight for revenue allocation, what amount of revenue will be allocated to Reading Fun in the first package (Reading Fun & Math Fun)?

A) $20

B) $22

C) $19

D) $25

 

12) Using the incremental method for revenue allocation, what amount of revenue will be allocated to Reading Fun in the first package (Reading Fun & Math Fun)? Assume Reading Fun is the primary product, followed by Math Fun, and then Analysis.

A) $20

B) $22

C) $19

D) $25

13) Using the stand-alone method with selling price as the weight for revenue allocation, what amount of revenue will be allocated to Math Fun in the package that contains all three products?

A) $24.12

B) $30.00

C) $22.80

D) $25.33

 

14) Using the incremental method, what amount of revenue will be allocated to Math Fun in the package that contains all three products?

A) $24.12

B) $30.00

C) $22.80

D) $25.33

Answer the following questions using the information below:

 

The Appliance Store sells a refrigerator and a freezer as a single package for $1,000. Other data are in the chart below.

 

 

Refrigerator

Full-size Freezer

Packaged Price

Selling price

$825

$375

$1,000

Manufacturing cost per unit

$620

$180

 

Stand-alone product revenues

$1,225,000

$775,000

 

 

15) Using the stand-alone method with selling price as the weight for revenue allocation, what amount will be allocated to the refrigerator?

A) $500.00

B) $825.00

C) $687.50

D) $625.00

 

16) Using the stand-alone method with stand-alone product revenues as the weight for revenue allocation, what amount will be allocated to the refrigerator?

A) $687.50

B) $612.50

C) $625.00

D) $825.00

17) Using the stand-alone method with manufacturing cost per unit as the weight for revenue allocation, what amount will be allocated to the refrigerator?

A) $500.00

B) $612.50

C) $620.00

D) $775.00

 

18) Using the stand-alone method with physical units as the weight for revenue allocation, what amount will be allocated to the refrigerator?

A) $500

B) $20

C) $775

D) $825