1. Trio Company sells three products, Alpha, Beta, and Gamma, for prices of $8, $7, and$5, respectively. They also offer combinations of the products for reduced overallprices. The following packages are available: (1) a package containing Alpha and Betasells for $13.50, (2) a package of Alpha and Gamma sells for $11.50, (3) a packagecontaining Beta and Gamma sells for $10.50, and (4) a package of all three products,Alpha, Beta, and Gamma, sells for $17.00.If Trio Company uses the Shapley value method, the amount of revenues from abundled package of all three products to be allocated to Beta would be$7.00$4.00$5.00$5.95$6.00

The value method of Shapley refers to the concept which includes distributing fairly both the gains…

Trio Company sells three products, Alpha, Beta, and Gamma, for prices of $8. $5, respectively. They also offer combinations of the products for reduced ow prices. The following packages are available: (1) a package containing Alpha a sells for $13.50, (2) a package of Alpha and Gamma sells for $11.50, (3) a pac containing Beta and Gamma sells for $10.50, and (4) a package of all three pr- Alpha, Beta, and Gamma, sells for $17.00. If Trio Company uses the Shapley value method, the amount of revenues from bundled package of all three products to be allocated to Beta would be

Trio Company sells three products, Alpha, Beta, and Gamma, for prices of $8. $5, respectively. They also offer combinations of the products for reduced ow prices. The following packages are available: (1) a package containing Alpha a sells for $13.50, (2) a package of Alpha and Gamma sells for $11.50, (3) a pac containing Beta and Gamma sells for $10.50, and (4) a package of all three pr- Alpha, Beta, and Gamma, sells for $17.00. If Trio Company uses the Shapley value method, the amount of revenues from bundled package of all three products to be allocated to Beta would be

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 3C

See similar textbooks

Similar questions

Carryon Company sells a product and a 12-month service package for that for a combined price of $730. Separately, the product and the service sell for $300 and $800, respectively. How much of the combined price should be allocated to the service package?
# You can buy a product from one of three companies. Company A for $3,200 with a trade discount of 30%, Company B for $2,900 with a trade discount of 20% and 10%, or Company C for $3,450 with a trade discount of 20%, 15%, 5%. Which company has the lowest net price?
TVLand sells home entertainment systems and also offers a complementary installation service. The same service is offered by other vendors for $50 on average, and TVLand typically charges approximately 40% more than other vendors for similar services on a stand-alone basis. Using the adjusted market assessment approach, the stand-alone selling price of the installation service is:
Prairie Manufacturing has four possible suppliers, all of which offer different credit terms. Except for the differences in credit terms, their products and services are virtually identical. The credit terms offered by these suppliers are shown in the following table: LOADING... (Note: Assume a 365-day year.) Supplier Credit terms J 2/15 net 40 EOM K 2/20 net 80 EOM L 1/10 net 60 EOM M 3/10 net 100 EOM a. Calculate the approximate cost of giving up the cash discount from each supplier. b. If the firm needs short-term funds, which are currently available from its commercial bank at 10%, and if each of the suppliers is viewed separately, which, if any, of the suppliers' cash discounts should the firm give up? c. Now assume that the firm could stretch by 30 days its accounts payable (net period only) from supplier M. What impact, if any, would that have on your answer in part b relative to this…
O’Hara Associates sells golf clubs, and with each sale of a full set of clubs provides complimentary club-fitting services. A full set of clubs with the fitting services sells for $1,500. Similar club-fitting services are offered by other vendors for $110, and O’Hara generally charges approximately 10% more than do other vendors for similar services. Assuming that the golf clubs and the club-fitting services are separate performance obligations, estimate the stand-alone selling price of the club-fitting services using the adjusted market assessment approach.
Kristin Company sells 300 units of its products for $20 each to Logan Inc. for cash. Kristin allows Logan to return any unused product within 30 days and receive a full refund. The cost of each product is $12. To determine the transaction price, Kristin decides that the approach that is most predictive of the amount of consideration to which it will be entitled is the probability-weighted amount. Using the probability-weighted amount, Kristin estimates that (1) 10 products will be returned and (2) the returned products are expected to be resold at a profit. Indicate the amount of (a) net sales, (b) estimated liability for refunds, and (c) cost of goods sold that Kristen should report in its financial statements (assume that none of the products have been returned at the financial statement date).
Kando Company incurs a $9 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $5 per unit and sell it for $12 per unit. If it does so, unit sales would remain unchanged and $5 of the $9 per unit costs of Product A would be eliminated. Should the company continue to manufacture Product A or purchase it for resale?
A retailer is considering the purchase of 500 units of a specific item from either of two suppliers. Their offers are as follows:Supplier One: $40 a unit, total of $20,000, 1/10, n/30, no charge for freight.Supplier Two: $39 a unit, total of $19,500, 2/10, n/30, plus freight of $500.Which of the two offers, Supplier One or Supplier Two, yields the lower price?
The joint costs is P85,000. NUBD currently sells both products at the split-off point. If NUBD makes decision which maximizes profit, its profit will increase by
Jesaki Express, a national package delivery service, charges a base price for overnight delivery of packages weighing 2 pounds or less and a surcharge for each additional pound (or fraction thereof). You are billed $28.32 for shipping a 5.3 pound package and $69.15 for shipping a 19.3 pound package. What is the base price that Jesaki Express charges for packages weighing 2 or less? $ . Round to the nearest cent. Yaster Shipping, a competing package delivery service, charges a base price for overnight delivery of packages weighing 1 pounds or less and a surcharge for each additional pound (or fraction thereof). You are billed $32.25 for shipping a 6 pound package and $79.12 for shipping a 19.7 pound package. What is the surcharge that Yaster Shipping charges for each additional pound (or fraction thereof) beyond 1 pounds? $ per pound above 1 pounds. Round to the nearest cent. Yaster Shipping, a competing package delivery service,…
O’Hara Associates sells golf clubs, and with each sale of a full set of clubs provides complementary club-fitting services. A full set of clubs with the fitting services sells for $1,500. Similar club-fitting services are offered by other vendors for $110, and O’Hara generally charges approximately 10% more than do other vendors for similar services. Estimate the stand-alone selling price of the club-fitting services using the adjusted market assessment approach.
The Stackpole Company retails two products, a standard and deluxe version of a luggage carrier.The standard carrier sells for $38, has variable costs of $23, and direct fixed costs of $800,000. The deluxe model sells for $56, has variable costs of $34, and direct fixed costs of $1,500,000. The company has common fixed costs of $250,000. The anticipated sales mix for the company is 4:1 or 80/20. The actual level of sales units currently is 250,000 (total for both products) and your target income is $1,250,000. You expect sales to rise 10% in the coming year. Directions: You have been hired to build a CVP model to help the company understand the impact of business conditions on operating income. Your model should include breakeven in units with a pro forma income statement, units sales for a target income of $1,250,000 with a pro forma income statement, an income statement reflecting actual current sales, margin of safety in dollars and %, and degree of operating leverage. Your model…