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 pack

ACCOUNTING

Multiple Choice

Elmo'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


$50


$7.20



1. Reading Fun & Math Fun


$88

Math Fun


$60


$8.00



2. Reading Fun & Analysis


$112

Analysis


$90


$10.00


3. All three

$152


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?

a. $48.25

b. $60.00

c. $45.60

d. $50.67

Click here for the SOLUTION