Revenue allocation for bundled products. Yves Parfum Company blends and sells designer 1. a.Allocation to fragrances. It has a Men’s Fragrances Division and a Women’s Fragrances Division, each with Monaco, $72 different sales strategies, distribution channels, and product offerings. Yves is now considering the sale of a bundled product consisting of a men’s cologne and a women’s perfume. For the most recent year, Yves reported the following:

REQUIRED 1. Allocate revenue from the sale of each unit of LAmour to Monaco and Innocence using:

a. The stand-alone revenue-allocation method based on selling price of each product

b. The incremental revenue-allocation method, with Monaco ranked as the primary product

c. The incremental revenue-allocation method, with Innocence ranked as the primary product

d. The Shapley value method, assuming equal unit sales of Monaco and Innocence.
2. Of the four methods in requirement 1, which one would you recommend for allocating L’Amour’s revenues to Monaco and Innocence? Explain.LO1

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Product Monaco (men's cologne) Innocence (women's perfume) L'Amour (Monaco + Innocence) Retail Price $ 80 120 180