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2. [10 points Huns Mighty Inc. enters into a contract with a customer to sell Products A, B and C in exchange for $108. The
2. [10 points Huns Mighty Inc. enters into a contract with a customer to sell Products A, B and C in exchange for $108. The firm regularly sells Product A separately and therefore the stand-alone selling price is directly observable. The stand-alone selling prices of Products B and C are not directly observable. Product B Price S40 20 60 Method Directly Observable Required: (a) [2 points] Allocate the transaction price to the three products. (b) [2 points] What methods (or approaches) could be used to estimate the prices of products B and C. (c) [2 points] Assume that the firm often sells products B and C as a package at a price of $68. Allocate the transaction price to the three products. (d) [4 point] As in part (c), the package price of products B and C is $68. Now, Huns offers product D in addition to products A, B, and C. The package price of the four products is $125. However, the stand-alone selling price for Product D is highly variable because Huns sells Product D to different customers for a broad range of amounts ($15 - $40). (1) Allocate the transaction price to product D. (2) If the price of the package of the four product is $115 instead of $125, how would you allocate the transaction price to product D
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