Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 15 - Allocation of Support-Department Costs, Common Costs, and Revenues - Assignment Material - Questions - Page 622: 15-13

Answer

The stand-alone revenue-allocation method uses specific product information within a bundle as weights to allocate bundled revenues to individual products. In contrast, the incremental revenue-allocation method ranks products within a bundle based on certain criteria and allocates revenue incrementally, with the primary product receiving revenue equivalent to its stand-alone value, while subsequent products receive additional revenue based on the number of products in the bundle beyond the primary one.

Work Step by Step

The stand-alone revenue-allocation method uses specific product information within a bundle as weights to allocate bundled revenues to individual products. In contrast, the incremental revenue-allocation method ranks products within a bundle based on certain criteria and allocates revenue incrementally, with the primary product receiving revenue equivalent to its stand-alone value, while subsequent products receive additional revenue based on the number of products in the bundle beyond the primary one.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.