Axiom Company blends and sells designer fragrances. It has a Men's Fragrances Division and a Women's Fragrances Division, each withdifferent sales strategies, distribution channels, and product offerings. Axiom is now considering the sale of a bundled product called Sync,consisting of one bottle of Him, a men's cologne, and one bottle of Her, a women's perfume, two of Axiom's very successful products. Axiom sellsequal quantities of Him and Her perfume. For the most recent year, Axiom reported the following:(Click the icon to view the sales information.)Data tableProductHimHerSync (Him and Her)Retail Price$ 40.00$60.0090.00X Requirement 1d. Allocate revenue from the sale of each unit of Sync to Him and Her using the Shapley value method, assuming equal unit salesof Him and Her. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.)HimI would recommend theHerShapleyRequirement 2. Of the four methods in requirement 1, which one would you recommend for allocating Sync's revenues to Him and Her? Explain.It is fairer than thein a manner that is close to the costs allocated under theallocation problem by consideringwhichIt allocates costsbut takes a more comprehensive view of the common cost

Variable costs are costs that varies with the change in the level of output whereas fixed costs are…

Answered: Axiom Company blends and sells designer…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Morning Sky, Inc. (MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products.The gaming market has traditionally been targeted at teenagers and young adults; however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculums has led to a significant increase in sales to younger children. MSI has always included games for younger children but now wants to expand its business to capitalize on changes in the industry. The company currently has excess capacity and is investigating several possible ways to improve profitability. MSI’s…
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