Question

A company sells a software suite that includes a word processor and spreadsheet applications. The suite sells for $270 and the items are also available separately for $200 (spreadsheet) and $170 (word processor). The spreadsheet app is by far the best seller of the standalone product sales. Using the incremental - revenue allocation method and assuming that the spreadsheet is the primary product, how much of the $270 revenue from the bundled product sale would be allocated to the spreadsheet and to the word processing products? O A. $200 of revenue for the spreadsheet and $0 for the word processor OB. $200 of revenue for the spreadsheet and $70 for the word processor O C. $146 of revenue for the spreadsheet and $124 for the word processor OD. $270 of revenue for the spreadsheet and $0 for the word processor

Answer 1

Revenue for the spreadsheet = $200

Revenue for word processor = $270-200 = $70

Option B. is correct answer.