Office Helper has three departments that sell furniture: the Sofa Department, the Easy Chair Department, and the Coffee Table Department. These products are sold individually and in a bundle. Office Helper sells roughly equal quantities of the three products. Managers of the three departments are evaluated on the performance of their individual departments. The individual selling prices and per unit costs of the products are as follows:

Furniture	Individual Selling Price per Unit	Cost per Unit
Sofas	$952	$705
Easy chairs	$493	$375
Coffee tables	$255	$420
Bundle purchase price	$900

1.

Allocate the revenue from the furniture bundle purchase to each of the products using the stand-alone method based on the individual selling price per unit.

2.

Allocate the revenue from the furniture bundle purchase to each of the products using the stand-alone method based on cost per unit.

3.

Allocate the revenue from the furniture bundle purchase to each of the products using the stand-alone method based on physical units (that is, the number of individual units of product sold per bundle).

4.

Which basis of allocation makes the most sense in this situation? Explain your answer.