Software For You encounters revenue allocation decisions with its bundled product sales. Two or more of the programs are sold as a single package. Managers at Software For You are keenly interested in individual product profitability figures. Information pertaining to its three bundled products and the stand-alone prices of its individual products is as follows:
‪
The unit inventory costs is $18, $20, and $25 for WP, SS, and AS, respectively. Assume AS is the primary product, followed by SS, then WP.
Required:
Allocate the bundle revenue to each product in Package C, using inventory unit costs as the weighting factor.

Question

Software For You encounters revenue allocation decisions with its bundled product sales. Two or more of the programs are sold as a single package. Managers at Software For You are keenly interested in individual product profitability figures. Information pertaining to its three bundled products and the stand-alone prices of its individual products is as follows:
‪  
The unit inventory costs is $18, $20, and $25 for WP, SS, and AS, respectively. Assume AS is the primary product, followed by SS, then WP.
Required:
Allocate the bundle revenue to each product in Package C, using inventory unit costs as the weighting factor.

Quizplus · Accepted Answer

The Answer of Software For You encounters revenue allocation decisions with its bundled product sales. Two or more of the programs are sold as a single package. Managers at Software For You are keenly interested in individual product profitability figures. Information pertaining to its three bundled products and the stand-alone prices of its individual products is as follows:
‪  
The unit inventory costs is $18, $20, and $25 for WP, SS, and AS, respectively. Assume AS is the primary product, followed by SS, then WP.
Required:
Allocate the bundle revenue to each product in Package C, using inventory unit costs as the weighting factor.

Software for You Encounters Revenue Allocation Decisions with Its Bundled