Question :
6) The best method to determining weights for the stand-alone : 1211851
6) The best method to determining weights for the stand-alone revenue-allocation method is ________.
A) selling prices revenue-allocation method because the weights explicitly consider the prices customers are willing to pay for the individual products
B) unit cost revenue-allocation method because it can be used on all occasions
C) the direct revenue-allocation method since selling prices or unit costs are difficult to calculate for individual products
D) physical-units revenue-allocation method because the physical units explicitly value the prices customers are willing to pay for the individual products
7) The method that ranks individual products in a bundle for revenue allocation is the ________.
A) stand-alone revenue-allocation method
B) incremental revenue-allocation method
C) unit-cost weighting method
D) physical-unit weighting method
8) Approaches used to rank products for revenue allocation can include ________.
A) surveying suppliers on the importance of each product
B) using recent data on stand-alone sales performance
C) having sales agents use their knowledge and intuition
D) surveying middlemen on the importance of each product
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) Craylon Corp sells two products X and Y. X sells for $200 and Y sells for $150. Both X and Y sell for $300 as a bundle. What is the revenue allocated to product Y, if product X is termed as the primary product in the bundle?
A) $100
B) $128.50
C) $110
D) $112.85
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? Assume Reading Fun is the primary product, followed by Math Fun, and then Analysis.
A) $24.12
B) $30.00
C) $22.80
D) $25.33
Answer the following questions using the information below:
Electro Corp 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
$800
$400
$1,000
Manufacturing cost per unit
$600
$200
Stand-alone product revenues
$1,200,000
$800,000
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) $333.33
C) $666.67
D) $676.67
