Question

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:

	Stand−Alone Selling Price	Cost		Package	Packaged Price
Reading Fun	$16	$3.40		1. Reading Fun​ & Math Fun	$42
Math Fun	$36	$4.05		2. Reading Fun​ & Analysis	$50
Analysis	$48	$5.45		3. All three	$76

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? (Do not round any intermediary​ calculations.)

A. $32.57

B. $18.00

C. $36.00

D. $27.36

Answer 1

	Stand−Alone Selling Price	Percentage of Stand−Alone Selling Price	Selling price allocated
Reading Fun	$16	16/100 = 16%	76 x 16% = 12.16
Math Fun	$36	36/100 = 36%	76 x 36% = 27.36
Analysis	$48	48/100 = 48%	76 x 48% = 36.48
Total	$100	100%	$76

Revenue allocated to Math fun = $27.36

Correct option is (D)

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