Question $4\mathrm{.}12$

Part A

The Fleet Street Company is a media company that owns various newspaper and magazine titles that are distributed throughout the country. The company sells each of its titles based on readily available selling prices.

Its most popular titles, and the related stand$-$alone selling price for each, are as follows:

The company offers two types of bundles: a magazine bundle $($i$.$e$.$ containing Vuvuzela and Dabble$)$ that retails for C$39$ and the newspaper bundle $($i$.$e$.$ containing the Special Edition and Mainstream newspaper$)$ that retails for $C21.$

During the festive season, the company introduced a third bundle, giving customers the chance to buy a bundle of all the newspaper and magazine titles for a fee of C$63.$ This offer, which is marketed as the festive bundle, also includes one$-$month's access to the digital newspaper. The digital newspaper was launched during the festive season and has never been sold on its own before. The company estimates that the cost of providing access to the digital newspaper is $C3$ for each user. A profit markup on cost of $16\%$ is considered appropriate.

Required:

a$)$ Show how the transaction price for the magazine bundle, the newspaper bundle and the festive bundle should be allocated.

b$)$ Briefly explain how the prices of each of the three bundle prices are allocated. Ignore loss allowances.