Question
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
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 | $24 | $3.65 |
| 1. Reading Fun & Math Fun | $51 |
| Math Fun | $37 | $4.30 |
| 2. Reading Fun & Analysis | $63 |
| Analysis | $53 | $5.35 |
| 3. All three | $90 |
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)? Assume Reading Fun is the primary product, followed by Math Fun, and then Analysis. (Do not round any intermediary calculations.)
| A. | $20.07 | |
| B. | $30.93 | |
| C. | $27.00 | |
| D. | $24.00 |
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Entrepreneurship
Authors: Andrew Zacharakis, William D Bygrave
5th Edition
9781119563099
