# Solved > Use the information below to answer the following:1837889 …

Use the information below to answer the following question(s).

John’s Video Game Outlet encounters revenue-allocation decisions with its bundled product sales. Here, two or more of the video games are sold as a single package. Managers at John’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

 Package Game A Game B Game C Packaged Price Package 1 \$25 \$30 N/A \$44 Package 2 25 N/A \$45 56 Package 3 25 30 45 76

The unit manufacturing costs are \$3.60, \$4.00, and \$5.00 for games A, B, and C, respectively.

21) Calculate the allocation of packaged price for Game A in Package 1, using selling prices as the base.

A) \$14.00

B) \$20.00

C) \$30.00

D) \$25.00

E) \$35.00

22) Calculate the allocation of packaged price Game A in Package 3, using selling prices as the base.

A) \$34.20

B) \$30.00

C) \$25.00

D) \$22.80

E) \$19.00

23) Calculate the revenue allocation for Game A in Package 1, using physical units as the base.

A) \$12.57

B) \$14.67

C) \$20.84

D) \$22.00

E) \$23.16

24) Calculate the allocation of packaged price for Game A in Package 1, using unit costs as the base.

A) \$12.57

B) \$13.97

C) \$20.84

D) \$22.00

E) \$23.16

25) 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.

E) total product costs.

Answer the following question(s) using the information below:

Elmo’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 \$50 \$7.20 1. Reading Fun & Math Fun \$88 Math Fun \$60 \$8.00 2. Reading Fun & Analysis \$112 Analysis \$90 \$10.00 3. All three \$152

Assume Reading Fun is the primary product, followed by Math Fun, and then Analysis.

26) 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) \$40

B) \$44

C) \$38

D) \$50

E) \$22

27) 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)?

A) \$40

B) \$44

C) \$38

D) \$50

E) \$28

28) 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) \$48.25

B) \$60.00

C) \$45.60

D) \$50.67

E) \$33.60

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

A) \$48.25

B) \$60.00

C) \$45.60

D) \$50.67

E) \$90.00

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

30) 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

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