Question & Answer: Inc. produces and sells DVDs to business people and students who are planning extended stays in…..

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Inc. produces and sells DVDs to business people and students who are planning extended stays in

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ChinaChina.

It has been very successful with two​ DVDs: Beginning

MandarinMandarin

and Conversational

MandarinMandarin.

It is introducing a third​ DVD, Reading

ChineseChinese

Characters. It has decided to market its new DVD in two different packages grouping the Reading

ChineseChinese

Characters DVD with each of the other two language DVDs. Read the requirements

LOADING…

.

Information about the separate DVDs and the packages follow.

DVD Selling Price
Beginning Mandarin (BegM) $75
Conversational Mandarin (ConM) $75
Reading Chinese Characters (RCC) $25
BegM + RCC $80
ConM + RCC $80

Requirement 1. Using the selling​ prices, allocate revenues from the

BegMBegM

​+

RCCRCC

package to each DVD in that package using​ (a) the​ stand-alone method;​ (b) the incremental​ method, in either​ order; and​ (c) the Shapley value method. ​(Round your answers to the nearest​ cent.)

BegM RCC
(a) Stand-alone
(b) Incremental
BegM primary user
RCC primary user
(c) Shapley
Using the selling​ prices, allocate revenues from theBegMBegM

​+RCCRCC

package to each DVD in that package using​ (a) the​ stand-alone method;​ (b) the incremental​ method, in either​ order; and​ (c) the Shapley value method.

2. Using the selling​ prices, allocate revenues from theConMConM

​+RCCRCC

package to each DVD in that package using​ (a) the​ stand-alone method;​ (b) the incremental​ method, in either​ order; and​ (c) the Shapley value method.

3. Which method is most appropriate for allocating revenues among the​ DVDs? Why?

Please show your work

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