Answer the Following Questions Using the Information Below:
Buzz's Educational

question 80

Multiple Choice

Answer the following questions using the information below:
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:
$$\begin{array} { | l | c | c | l | c | } \hline & \begin{array} { c } \text { Stand-Alone } \\\text { Selling Price }\end{array} & { \text { Cost } } &{ \text { Package } } & \begin{array} { c } \text { Packaged } \\\text { Price }\end{array} \\\hline \text { Reading Fun } & \$ 25 & \$ 3.60 & \text { 1. Reading Fun \& Math Fun } & \$ 44 \\\hline \text { Math Fun } & \$ 30 & \$ 4.00 & \text { 2. Reading Fun \& Analysis } & \$ 56 \\\hline \text { Analysis } & \$ 45 & \$ 5.00 & \text { 3. All three } & \$ 76 \\\hline\end{array}$$
-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.

• A) $24.12
• B) $30.00
• C) $22.80
• D) $25.33

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Definitions:

Shareholders

Individuals or entities that own shares in a company, giving them ownership stakes and certain rights regarding its operation.

Parent Entity

A company that holds a controlling interest in another company or subsidiary, having significant influence over its operations and financial decisions.

Total Profits

signifies the entire sum of earnings or profits generated by a business before deducting any expenses.

Unrealised Profits

Profits that have been recorded on paper through accounting but have not yet been actualized through cash transactions.