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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.
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