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)
_____________
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)
_____________
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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