Axiom Company blends and sells designer fragrances. It has a Men's Fragrances Division and a Women's Fragrances Division, each with different 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 sells equal quantities of Him and Her perfume. For the most recent year, Axiom reported the following: (Click the icon to view the sales information.)

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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Axiom Company blends and sells designer fragrances. It has a Men's Fragrances Division and a Women's Fragrances Division, each with
different 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 sells
equal quantities of Him and Her perfume. For the most recent year, Axiom reported the following:
(Click the icon to view the sales information.)
Data table
Product
Him
Her
Sync (Him and Her)
Retail Price
$ 40.00
$
60.00
90.00
X
Transcribed Image Text:Axiom Company blends and sells designer fragrances. It has a Men's Fragrances Division and a Women's Fragrances Division, each with different 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 sells equal quantities of Him and Her perfume. For the most recent year, Axiom reported the following: (Click the icon to view the sales information.) Data table Product Him Her Sync (Him and Her) Retail Price $ 40.00 $ 60.00 90.00 X
Requirement 1d. Allocate revenue from the sale of each unit of Sync to Him and Her using the Shapley value method, assuming equal unit sales
of Him and Her. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.)
Him
I would recommend the
Her
Shapley
Requirement 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 the
in a manner that is close to the costs allocated under the
allocation problem by considering
which
It allocates costs
but takes a more comprehensive view of the common cost
Transcribed Image Text:Requirement 1d. Allocate revenue from the sale of each unit of Sync to Him and Her using the Shapley value method, assuming equal unit sales of Him and Her. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) Him I would recommend the Her Shapley Requirement 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 the in a manner that is close to the costs allocated under the allocation problem by considering which It allocates costs but takes a more comprehensive view of the common cost
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