Exam 16: Revenue and Customer Profitability Analysis

Answer the following questions using the information below: 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: Assume Reading Fun is the primary product, followed by Math Fun, and then Analysis. -Using the incremental method for revenue allocation, what amount of revenue will be allocated to Reading Fun in the first package (Reading Fun & Math Fun)? Assume Reading Fun is the primary product, followed by Math Fun, and then Analysis.

Use the information below to answer the following question(s). Remote Company manufactures remote control devices for electronic equipment. The following information was collected during June: -What is the company's market-size variance?

Answer the following questions using the information below: The Appliance Store sells a refrigerator and a freezer as a single package for $1,000. Other data are in the chart below. -Using the stand-alone method with manufacturing cost per unit as the weight for revenue allocation, what amount will be allocated to the refrigerator?

Answer the following questions using the information below: The Appliance Store sells a refrigerator and a freezer as a single package for $1,000. Other data are in the chart below. -Using the stand-alone method with selling price as the weight for revenue allocation, what amount will be allocated to the refrigerator?

Use the information below to answer the following question(s). Teddy Bear Company sold a total of 30,000 stuffed tigers and lions. During August the following information was gathered: -What is the total sales-mix variance?

The sales-mix variance can be explained in terms of the budgeted contribution margin per composite unit of the sales mix.

Software For You encounters revenue-allocation decisions with its bundled product sales. Here, two or more units of the software are sold as a single package. Managers at Software For You are keenly interested in individual product-profitability figures. Information pertaining to its three bundled products and the stand-alone selling prices of its individual products is as follows: Required: a. Using the stand-alone revenue-allocation method, allocate the $380 packaged price of "All Three" to the three software products b. Allocate the $380 packaged price of "All Three" to the three software products using the incremental revenue-allocation method. Assume Word Processing is the primary product, followed by Spreadsheet, and then Accounting Software.

The Omega Corporation manufactures two types of vacuum cleaners: the ZENITH for commercial building use and the House-Helper for residences. Budgeted and actual operating data for the year are as follows: Required: Compute the sales-mix variance and the sales-quantity variance by type of vacuum cleaner, and in total. (in terms of the contribution margin)

Answer the following questions using the information below: 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: Assume Reading Fun is the primary product, followed by Math Fun, and then Analysis. -Using the stand-alone method with selling price as the weight for revenue allocation, what amount of revenue will be allocated to Reading Fun in the first package (Reading Fun & Math Fun)?

Customer profitability analysis is used by companies to identify the most valuable customers. Required a. What are some of the metrics that can be used to assess customer profitability? b. What are some of the challenges companies face in customer profitability analysis? c. What are some of the ethical issues raised by customer profitability analysis?

Answer the following questions using the information below: The Appliance Store sells a refrigerator and a freezer as a single package for $1,000. Other data are in the chart below. -Using the stand-alone method with stand-alone product revenues as the weight for revenue allocation, what amount will be allocated to the refrigerator?

The stand-alone method may use selling price or unit costs to allocate revenues.

The market-size variance is the difference between two amounts: (1) the budgeted amount at budgeted mix based on the actual market size in units and the actual market share, and (2) the budgeted amount at budgeted mix based on actual market size in units and the budgeted market share.

Describe and discuss the two methods of allocating the revenues of a bundled package to the individual products in that package. Describe any special problems associated with the method.

Easton Photography Ltd. sells cameras and related equipment. It often packages these into bundles for sale to consumers. Currently it is offering the following "package" deal- a camera, a photo printer, and a camera accessory pack that includes battery recharger, case and various lens adapters. The package deal is selling for $740. The individual prices and costs of these components are as follows: Required: Allocate the revenue among the products under each of the following: a. Unit selling prices b. Unit costs c. Physical units

Which of the following is the best reason(s) for a company to give a price discount to customer?

Answer the following questions using the information below: The Appliance Store sells a refrigerator and a freezer as a single package for $1,000. Other data are in the chart below. -Using the stand-alone method with physical units as the weight for revenue allocation, what amount will be allocated to the refrigerator?

To more accurately assess customer profitability, corporate-sustaining costs should be allocated.

If one of four distribution channels is discontinued, corporate-sustaining costs such as general administration costs will most likely be reduced by 25%.

Which of the following statements is true?