Question: Swippy Software offers three software products: a word processing software, a spreadsheet software, and an accounting software. Information for the stand-alone selling pricesand costs of
Swippy Software offers three software products: a word processing software, a spreadsheet software, and an accounting software. Information for the stand-alone selling pricesand costs of its individual products is as follows:
Stand-Alone Selling Price, Cost
Word Processing (WP) $75 $18
Spreadsheet (SS) $90 $20
Accounting Software (AS) $65 $25
Recently, Swippy Software has begun offering software bundles, which includes all three programs at a discounted price. The bundle price for the software is $185.00
Using the unit cost as the weights, allocate the bundled price to the three programs using the stand-alone revenue-allocation method.
Allocate the bundled price to the three types products using the incremental revenue-allocation method. Assume Spreadsheets is the primary product, followed by Word Processing, and then Accounting Software.
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