Home Page Layout Formulas Insert A Product Retail Price 2 Smarty 3 Sublime 4 Dynamic Duo (Smarty and Sublime) $ 40.00 60.00 90.00 Required 1. Allocate revenue from the sale of each unit of Dynamic Duo to Smarty and Sublime using the following: a. The stand-alone revenue-allocation method based on selling price of each product b. The incremental revenue-allocation method, with Smarty ranked as the primary product c. The incremental revenue-allocation method, with Sublime ranked as the primary product d. The Shapley value method 2. Of the four methods in requirement 1, which one would you recommend for allocating Couture's rev- enues to Smarty and Sublime? Explain.
Home Page Layout Formulas Insert A Product Retail Price 2 Smarty 3 Sublime 4 Dynamic Duo (Smarty and Sublime) $ 40.00 60.00 90.00 Required 1. Allocate revenue from the sale of each unit of Dynamic Duo to Smarty and Sublime using the following: a. The stand-alone revenue-allocation method based on selling price of each product b. The incremental revenue-allocation method, with Smarty ranked as the primary product c. The incremental revenue-allocation method, with Sublime ranked as the primary product d. The Shapley value method 2. Of the four methods in requirement 1, which one would you recommend for allocating Couture's rev- enues to Smarty and Sublime? Explain.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Revenue allocation, bundled products. Couture Corp sells Samsung 7 cases. It has a Men’s Division and a Women’s Division. Couture is now considering the sale of a bundled product called Dynamic Duo consisting of Smarty, a men’s case, and Sublime, a women’s case. For the most recent year, Couture sold equal quantities of Smarty and Sublime and reported the following:
Transcribed Image Text:Home
Page Layout
Formulas
Insert
A
Product
Retail Price
2 Smarty
3 Sublime
4 Dynamic Duo (Smarty and Sublime) $
40.00
60.00
90.00
Required
1. Allocate revenue from the sale of each unit of Dynamic Duo to Smarty and Sublime using the following:
a. The stand-alone revenue-allocation method based on selling price of each product
b. The incremental revenue-allocation method, with Smarty ranked as the primary product
c. The incremental revenue-allocation method, with Sublime ranked as the primary product
d. The Shapley value method
2. Of the four methods in requirement 1, which one would you recommend for allocating Couture's rev-
enues to Smarty and Sublime? Explain.
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