Business Horizons (BH) produces and markets DVDs for sale to the business community. It hires well-known business speakers to present new developments in their area of expertise in DVD format. The compensation paid to each speaker is individually negotiated. It always has a component based on the percentage of revenues from the sale of the DVD, but that percentage is not uniform across speakers.
Moreover, some speakers negotiate separate fixed-dollar payments or multiple-DVD deals.
BH sells most DVDs as separate items. However, there is a growing trend for DVDs also to be sold as part of bundled packages. BH offered bundled packages of its three best- selling DVDs in 2013. Individual and bundled sales of these three DVDs for 2013 are:
1. Allocate the bundled product revenues to the individual DVDs using the stand-alone revenue-allocation method (using selling prices as the weights).
2. Describe (without computations) an alternative method of allocating the bundled product revenue to that in requirement 1.

  • CreatedJuly 31, 2015
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