Software for You Encounters Revenue-Allocation Decisions with Its Bundled Product

Essay

Software For You encounters revenue-allocation decisions with its bundled product sales.Here,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.