Cost Accounting 14th Edition Problem 15-35

COST ACCOUNTING P 15-35 Required: 1. Using selling prices, allocate the $1,000 gateway-package revenue to the three divisions using: a. The stand-alone revenue-allocation method | Selling Price| Rev. Allocation| Precio por cuarto para dos personas 2 noches| $800| $581. 82| Dos “rounds” de golf con precio de | 375| 272. 73| Una cena para dos| 200| 145. 45| | $1,375| $1,000| b. The incremental revenue-allocation method | Selling Price| Rev. Allocation| Dos “rounds” de golf con precio de | $375| $375| Precio por cuarto para dos personas 2 noches| 800| 625| Una cena para dos| 200| 0| $1,375| $1,000| 2. What are the pros and cons of the two methods in requirement 1? Pros sobre el “stand alone”: 1. Cada elemento en el “bundle” recibe una porcion del ingreso. 2. Es un metodo simple para implementar. Contras sobre el “stand-alone” 1. Este metodo puede ignorar la importancia que le da el cliente a cada elemento del “bundle”. Por ejemplo, algunos clientes pueden estar interesados en el golf y no en la cena y viceversa. Pros sobre el metodo incremental: 1. Una vez se determina que secuencia utilizar para asignar, la implementacion es automatica.

Contras sobre el metodo incremental: 1. Algunos productos no van a recibir asignacion de ingresos. Aun cuando se incurran los costos, no recibe asignacion de ingresos. 3. Because the recreation division is able to book the golf course at 100% capacity, the company CEO has decided to revise the Gateway package to only include the lodging and food offerings shown previously. The new package will sell for $900. Allocate the revenue to the lodging and food divisions using the following: 1. The Shapely value method.

Incremental-Revenue Allocation Method|  | Weighted Shapely Value| Primary Product 1st| Unit SP| Allocation| W| Lodging| Food| Lodging|  |  | $800 | $800 | 1| $800 |  | Food|  |  |  | 200 | 100 | 1|  | $100 | | | | | | $1,000 | $900 | |  |  | | | | | | | | |  |  | Primary Product 1st| Unit SP| Allocation| |  |  | Food|  |  |  | $200 | $200 | 1|  | 200 | Lodging|  |  | 800 | 700 | 1| 700 |  | | | | | | $1,000 | $900 | |  |  | | | | | | | | | $750 | $150 | | | | | | | | | | | 2. The weighted Shapely value method, assuming that lodging is three times as likely to sell as the food.

Incremental-Revenue Allocation Method|  | Weighted Shapely Value| Primary Product 1st (1)| Unit SP| Allocation| W| Lodging| Food| Lodging|  |  | $800 | $800 | 3| $2,400 |  | Food|  |  |  | 200 | 100 | 3|  | $300 | | | | | | $1,000 | $900 | |  |  | | | | | | | | |  |  | Primary Product 1st (2)| Unit SP| Allocation| |  |  | Food|  |  |  | $200 | $200 | 1|  | 200 | Lodging|  |  | 800 | 700 | 1| 700 |  | | | | | | $1,000 | $900 | |  |  | | | | | | | | | $775 | $125 | | | | | | | | | (1) Lo mas probable sucedera 3 de 4 veces. (2) Lo mas probable sucedera 1 de 4 veces.