Question : SHORT ANSWER. Write the word or phrase that best completes each : 1196121

 

SHORT ANSWER.

Write the word or phrase that best completes each statement or answers the question. 72)

Give examples of bundled products for each of the following industries:

 

a.Resort hotel

b.Bank

c.Restaurant

d.Computer store

e.Gasoline service station/convenience store

f.Software manufacturer

 

 72)

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73)

Max’s Movie Store encounters revenue-allocation decisions with its bundled product sales. Here, two or

more of the movie videos are sold as a single package. Managers at Max’s 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

New Releases

$15

$2.00

 

New & Old

$20

Older Releases

$10

$1.50

 

New & Classics

$17

Classics

$8

$1.25

 

All three

$25

 

Required:

a.With selling prices as the weights, allocate the $25 packaged price of “All Three” to the three videos using the stand-alone revenue-allocation method.

 

b.Allocate the $25 packaged price of “All Three” to the three types of videos using the incremental revenue-allocation method. Assume New Releases is the primary product, followed by Older Releases, and then Classics.

 73)

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74)

Harry’s Movie Store encounters revenue-allocation decisions with its bundled product sales. Here, two or more of the movie videos are sold as a single package. Managers at Harry’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         New         Old     Classics         Price

New & Old$20$15N/A$30

New & Classics20N/A$1530

All three 20151540

 

The unit inventory costs is $4.00, $3.00, and $2.50 for New Releases, Older Releases, and Classics, respectively. In all cases, the New movie is considered to be the primary product.

 

Required:

 

a.Allocate the bundled revenue to each product in the ‘New & Classics’ bundle, using selling prices as the base.

b.What is the allocated revenue to the New Movie in each bundle, using the incremental revenue-allocation method? 74)

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75)

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.with individual product costs as the weights.

3.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.

 75)

_____________

76)

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. The SS is considered to be the second incremental product in each case.

 

Required:

 

a.Allocate the bundle revenue to each product in Package C, using inventory unit costs as the weighting factor.

b.Allocate the bundle revenue to each product in Package C, using the incremental revenue-allocation method? 76)

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77)

Big Products sells only one product. For 20×1 it sold 22,000 items when the budget was 16,000 items. The increased sales were due in part to reduced selling prices averaging $52. The budgeted selling price was $60. Total variable costs were budgeted at $144,000 .

 

Required:

 

Compute the sales-volume variance. Why doesn’t the sales volume variance equal the difference between budgeted and actual revenue?

77)

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78)

Columbia Coffee, Inc. sells two types of coffee, Regular and Decaf. The monthly budget for Canadian coffee sales is based on a combination of last year’s performance, a forecast of industry sales, and the company’s expected share of the Canadian market. The following information is provided for March:

 

Budgeted

 

 

Actual

RegularDecafRegularDecaf

Price per kilogram

$50$60$52$60

Variable cost per kilogram

 24262428

Contribution margin

 

 

 

$26$34$28$32

 

Sales (in kgs.) 4,0004,5003,7004,800

 

Budgeted fixed costs are $58,000. Actual fixed costs are $62,000.

 

Required:

 

Calculate the static budget and flexible budget variances for contribution margin, for the company for March. 78)

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79)

A sporting goods division sells two types of juvenile skates; Atom and Mite. The following data are from the division’s August results. Actual sales were 2,200 items, and the budget was 1,600 items.

 

ActualBudgetActualBudget

SalesSalesSalesSales

Price PriceMixMix

Atom$115$12065%60%

Mite9910635%40%

 

Variable costs per unit (pair) were $56 for the Atom skates, and $119,350 in total.

 

Required:

 

Compute the total sales-mix variance.

79)

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80)

The Chair Company manufactures two modular types of chairs; one for the residential (home) market, and the other for the office market. Budgeted and actual operating data for the year 20×1 are:

 

Static BudgetActual Results

Home OfficeHomeOffice

Number of chairs sold

 260,000140,000248,400165,600

Contribution margin

$26,000,000 $11,200,000 $22,356,000$13,248,000

 

In late 20×0, an office-products research firm estimated the industry volume for residential and office chairs of the type sold by the Chair company to be 2,400,000.. Actual industry volume for the year 20×1 was 2,200,000 chairs.

 

Required:

 

1.Compute the sale-mix variance and the sales- quantity variance by type of chair, and in total.

2.Compute the market-share variance and market-size variance. 80)

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