Burger Queen offers a lunch meal deal for its customers. The customer will get a burger, fry, soft drink, and ice cream for $5. If the customer were to buy each item individually, the cost would be broken down as follows: Using the stand-alone cost allocation, how must of the transaction price should be allocated to the fry, soft drink, and ice cream? (do not round intermediary calculations)

Question

Burger Queen offers a lunch meal deal for its customers. The customer will get a burger, fry, soft drink, and ice cream for $5. If the customer were to buy each item individually, the cost would be broken down as follows:  Using the stand-alone cost allocation, how must of the transaction price should be allocated to the fry, soft drink, and ice cream? (do not round intermediary calculations)

Quizplus · Accepted Answer

$2.50 + $1.25 + $1 + $1.50 = $6.25
$1.25 ÷ $6.25 x $5.00 = $1
$1 ÷ $6.25 x $5.00 = $.80
$1.50 ÷ $6.25 x $5.00 = $1.20
Burger cost + fry cost + drink cost + ice cost = total cost
Fry ÷ total cost x trans price = fry alloc price
Drink ÷ total cost x trans price = drink alloc price
Ice cream ÷ total cost x trans price = ice cream alloc price

Burger Queen Offers a Lunch Meal Deal for Its Customers