A product and service are bundled together and sold to customers for $450. The fair values of the product and service are $350 and $150 respectively. Under the residual method, how much would be allocated to the product? O $350.00 O $150.00 O $388.89 O $300.00

Shouldn't we deduct costs to sell the equipment amount of £100,000 from Fair value to get Net Selling Price which will be £540,000 so $40,000 impairment?

Island Novelties, Inc., of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit, and annual sales volume are as follows: Selling price per unit Variable expense per unit Number of units sold annually Hawaiian Fantasy 20 9 22,000 $ $ Tahitian Joy $ $ 110 33 6,000 Fixed expenses total $664,000 per year. Required: 1. Assuming the sales mix given above, do the following: a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. b. Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage. 2. The company has developed a new product called Samoan Delight that sells for $30 each and that has variable expenses of $24 per unit. If the company can sell 22,000 units of Samoan Delight without incurring any additional fixed expenses: a. Prepare a revised contribution format…

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