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:

Using the incremental method, what amount of revenue will be allocated to Math Fun in the package that contains all three products? Assume Reading Fun is the primary product, followed by Math Fun, and then Analysis. (Do not round any intermediary calculations.)
A) $20.89
B) $37.00
C) $28.62
D) $35.69

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 pertaining to three bundled products and the stand-alone prices is as follows:

Using the incremental method, what amount of revenue will be allocated to Math Fun in the package that contains all three products? Assume Reading Fun is the primary product, followed by Math Fun, and then Analysis. (Do not round any intermediary calculations.)
A) $20.89 
B) $37.00 
C) $28.62 
D) $35.69

Quizplus · Accepted Answer

$82 - $21 primary product = $61 revenues remaining to be allocated to other products; $37 since there are revenues remaining to cover the selling price of Reading Fun, the first incremental product.

Buzz's Educational Software Outlet Sells Two or More of the Video