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Nero Caf operates on two support ceparumens - Administrative Services and Information System - and two operating departments - coffee bar and deli. The accounting
Nero Caf operates on two support ceparumens - Administrative Services and Information System - and two operating departments - coffee bar and deli. The accounting system reported the following budgeted and actual amounts for the first 6 months of 2022 : While variable overhead costs are usually assigned based on actual hours used, fixed overhead costs are allocated based on budgeted hours used. Nero Caf would run promotion sales for a bundled purchase, consisting of one cup of Americano and one crispy mini-Neapolitan pizza, every Sunday brunch in all its London chains. The coffee bar and deli chains sell equal quantities of the coffee and mini-pizza. For the most recent 6 months, the accounting system reported the following: Required: 1. Allocate the revenue from the sales of each unit of the Sunday Brunch Promo using the following methods: a) Stand-alone revenue-allocation method based on selling price of each product (2 marks) b) Incremental revenue-allocation method based, with Americano ranked as the primary product (2 marks) c) Incremental revenue-allocation method based, with crispy mini-Neapolitan pizza ranked as the primary product d) Shapley value method (2 marks) (2 marks)
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