Karl Values Word at $100 and Excel at $40, and Adam

question 83

Multiple Choice

Karl values Word at $100 and Excel at $40, and Adam values Word at $20 and Excel at $90. If the programs are sold as a bundle, what is the profit-maximizing price?

• A) $90
• B) $100
• C) $110
• D) $140

---

Definitions:

FOB Shipping Point

A shipping term indicating that the buyer assumes responsibility for the goods and the associated costs once the goods leave the seller's premises.

Ending Inventory

Ending inventory is the total value of all inventory, including raw materials, work-in-progress, and finished goods, that a company has at the end of an accounting period.

FOB Destination

A shipping term indicating that the seller bears delivery costs and risks until the goods reach the buyer's specified location.

Perpetual Inventory System

A perpetual inventory system continuously updates the record of inventory with each sale or purchase, providing real-time data on the inventory levels.