1. Using the selling prices, allocate revenues from the BegM + RCC package to each DVD in that packages using a) the stand alone method b) the incremental methos (allocate BegM first)

2. Using the selling prices, allocate revenues from the Con M +RCC package to each DVD in that package using the a) stand alone method b) the incremental method, in either order.

3. Which method is most appropriate for allocating revenues among the DVDs? Why?

4. Discuss the advantages and disdvantages of both methods.

LO O 1. a. Allocated to RCC, $36 117-17 Revenue allocation. Lee Shu-yu Inc. produces and sells DVDs to business people and students who are planning extended stays in China. It has been very successful with two DVDs: Beginning Mandarin and Conversational Mandarin. It is introducing a third DVD, Reading Chinese Characters. It has decided to market its new DVD in two different packages , grouping the Reading Chinese Characters DVD with each of the other two language DVDs. Information about the separate DVDs and the packages follows. Selling Price $60 50 DVD Beginning Mandarin (BegM) Conversational Mandarin (ConM) Reading Chinese Characters (RCC) BegM + RCC ConM+ RCC 40 90 72