Abdulkarem Essay

2235 Words Apr 10th, 2013 9 Pages
Fundamentals of Cost and Management Accounting
Part Four: Allocation of Support Department Costs, Common Costs and Revenues
Exercise No. 4
الاسم: الرقم الأكاديمي: رقم الشعبة:
Choose the best answer for every question of the following questions:
1) Max's Movie Store encounters revenue-allocation decisions with its bundled product sales. Here, two or more of the movie videos are sold as a single package. Managers at Max's 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:

| Stand-Alone Selling Price, |
…show more content…
A) $687.50
B) $612.50
C) $625.00
D) $825.00
Answer: B
Explanation: B) Refrigerator $1,225,000 / ($1,225,000 + $775,000) × $1,000 = $612.50

5) Using the stand-alone method with manufacturing cost per unit as the weight for revenue allocation, what amount will be allocated to the refrigerator?
A) $500.00
B) $612.50
C) $620.00
D) $775.00
Answer: D
Explanation: D) Refrigerator $620 / ($620 + $180) × $1,000 = $775

6) Using the stand-alone method with physical units as the weight for revenue allocation, what amount will be allocated to the refrigerator?
A) $500
B) $20
C) $775
D) $825
Answer: A
Explanation: A) (1 / 2) × $1,000 = $500

Answer the following questions using the information below:
Buzz'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: | Stand-Alone Selling Price | Cost | | Package | PackagedPrice | Reading Fun | $25 | $3.60 | | 1. Reading Fun & Math Fun | $44 | Math Fun | $30 | $4.00 | | 2. Reading Fun & Analysis | $56 |

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