Answer the following questions using the information below:
Adelaide 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:
$$\begin{array} { | c | c | c |c| c | c | }
\hline & \begin{array} { c }
\text { Stand-Alone } \
\text { Selling Price }
\end{array} & \text { Cost } && \text { Package } & \begin{array} { c }
\text { Packaged } \
\text { Price }
\end{array} \
\hline \text { Reading Fun } & \$ 55 & \$ 7.20 && \text { 1. Reading Fun \& Math Fun } & \$ 98 \
\hline \text { Math Fun } & \$ 65 & \$ 8.00 && \text { 2. Reading Fun \& Science } & \$ 122 \
\hline \text { Science } & \$ 95 & \$ 10.00 && \text { 3. All three } & \$ 162 \
\hline
\end{array}$$
-Using the stand-alone method with selling price as the weight for revenue allocation,what amount of revenue will be allocated to Reading Fun in the first package (Reading Fun & Math Fun)?

Question

Answer the following questions using the information below:
Adelaide 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:
 $$\begin{array} { | c | c | c |c| c | c | } 
\hline & \begin{array} { c } 
\text { Stand-Alone } \
\text { Selling Price }
\end{array} & \text { Cost } && \text { Package } & \begin{array} { c } 
\text { Packaged } \
\text { Price }
\end{array} \
\hline \text { Reading Fun } & \$ 55 & \$ 7.20 && \text { 1. Reading Fun \& Math Fun } & \$ 98 \
\hline \text { Math Fun } & \$ 65 & \$ 8.00 && \text { 2. Reading Fun \& Science } & \$ 122 \
\hline \text { Science } & \$ 95 & \$ 10.00 && \text { 3. All three } & \$ 162 \
\hline
\end{array}$$
-Using the stand-alone method with selling price as the weight for revenue allocation,what amount of revenue will be allocated to Reading Fun in the first package (Reading Fun & Math Fun)?

Quizplus · Accepted Answer

To calculate revenue allocation using the stand-alone method, we need to multiply the selling price of each game in the package with the proportion of the package's total selling price.

For the first package (Reading Fun & Math Fun), the total selling price is $30. We know that Reading Fun has a stand-alone selling price of $25 and Math Fun has a stand-alone selling price of $20. So, the proportion of the package's selling price that is attributable to Reading Fun is:

$25 / ($25 + $20) = 0.555

Similarly, the proportion that is attributable to Math Fun is:

$20 / ($25 + $20) = 0.445

To calculate the revenue allocation to Reading Fun, we multiply its stand-alone selling price with its proportion of the package's selling price:

$25 x 0.555 = $13.88

Therefore, the correct answer is option B) $44.91

Answer the Following Questions Using the Information Below: Adelaide Educational

Answer the Following Questions Using the Information Below:
Adelaide Educational