Software For You encounters revenue allocation decisions with its bundled product sales.Two or more units of the software 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 selling prices of its individual products is as follows:
Required:
a.Using the stand-alone revenue allocation method, allocate the $380 packaged price of "All Three" to the three software products
b.Allocate the $380 packaged price of "All Three" to the three software products using the incremental revenue allocation method.Assume Word Processing is the primary product, followed by Spreadsheet, and then Accounting Software.

Question

Software For You encounters revenue allocation decisions with its bundled product sales.Two or more units of the software 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 selling prices of its individual products is as follows:
  Required:
a.Using the stand-alone revenue allocation method, allocate the $380 packaged price of "All Three" to the three software products
  b.Allocate the $380 packaged price of "All Three" to the three software products using the incremental revenue allocation method.Assume Word Processing is the primary product, followed by Spreadsheet, and then Accounting Software.

Quizplus · Accepted Answer

The Answer of Software For You encounters revenue allocation decisions with its bundled product sales.Two or more units of the software 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 selling prices of its individual products is as follows:
  Required:
a.Using the stand-alone revenue allocation method, allocate the $380 packaged price of "All Three" to the three software products
  b.Allocate the $380 packaged price of "All Three" to the three software products using the incremental revenue allocation method.Assume Word Processing is the primary product, followed by Spreadsheet, and then Accounting Software.

Software for You Encounters Revenue Allocation Decisions with Its Bundled