Question

Electro Corp sells a refrigerator and a freezer as a single package for $1,060.

Other data are in the chart below.

	Refrigerator	Fullminus−size Freezer	Packaged Price
Selling price	$860	$400	$1,060
Manufacturing cost per unit	$600	$250
Standminus−alone product revenues	$1,290,000	$900,000

Using the stand−alone method with selling price as the weight for revenue​ allocation, what amount will be allocated to the​ refrigerator? (Do not round any intermediary​ calculations.)

A. $336.51

B.$530.00

C. $723.49

D. $860.00

Answer 1

Selling price of refrigerator = $860

Selling price of full size freeze = $400

Total sale price of refrigerator and full size freeze = Selling price of refrigerator + Selling price of full size freeze

= 860 + 400

= $1,260

Packaged price = $1,060

Selling price to be allocated to refrigerator = Packaged price x Selling price of refrigerator/Total sale price of refrigerator and full size freeze

= 1,060 x 860/1260

= $723.49

Correct option is (c)