Answer the Following Questions Using the Information Below:
Adelaide Educational

question 117

Multiple Choice

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 Math Fun in the package that contains all three products?

• A)$50.67
• B)$48.25
• C)$48.98
• D)$65.00

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Definitions:

Selling Price

The amount for which a product or service is sold to customers, determining the revenue generated from sales.

Cost Principle

Accounting principle that requires assets, services, and goods to be recorded at their original cost rather than their current market value.

Cost Principle

An accounting principle that states transactions and assets should be recorded at their original purchase cost, factoring out any market value changes.

Revaluing Assets

The process of adjusting the book value of an asset to reflect its current market value rather than its original purchase price.