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15-25 Revenue allocation, bundled products. Yves Parfum Company blends and sells designer fragrances. It has a Mens Fragrances Division and a Womens Fragrances Division, each
15-25 Revenue allocation, bundled products. Yves Parfum Company blends and sells designer fragrances. It has a Mens Fragrances Division and a Womens Fragrances Division, each with different sales strategies, distribution channels, and product offerings. Yves is now considering the sale of a bundled product consisting of a mens cologne and a womens perfume. For the most recent year, Yves reported the following: --- ----------PRODUCT --------------------RETAIL PRICE Monaco (Men's Cologne) -------------------$48 Innocence (Women's Perfume)------------$112 L'Amour (Monaco + Innocence)------------$130 --- 1 . Allocate revenue from the sale of each unit of LAmour to M onaco and Innocence using the following: --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 LAmours revenues to Monaco and Innocence? Explain
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