Question

Triangle Travel offers their normal Bahama Get-Away travel package for $2,000, and offers their special Bahama Elite package (with additional guided tours) for $2,500. Triangle hasn't offered the Elite package previously, and is unsure what it would charge for the additional guided tours absent the basic Bahama Get-Away package. How much of the Elite transaction price should Triangle assign to the basic Bahama Get-Away portion of the Elite package?

a) $2,500
b) $2,000
c) $1,250
d) $0

Answer 1

The portion of the Triangle Travel's Bahama Elite package price that should be assigned to the basic Bahama Get-Away is $2,000. This is based on the cost of the basic package and the additional price for the Elite package which includes extra guided tours.

Step-by-step explanation:

Transaction allocations enable you to distribute transaction amounts across multiple dimensions such as departments, locations, projects, or classes. Transaction allocations are intended for use on single line items, allowing you to distribute amounts during entry of a transaction, usually a one-time action. The question at hand is asking how much of the Triangle Travel's Bahama Elite package price should be assigned to the basic Bahama Get-Away segment of it. Given that the standard Bahama Get-Away package is normally priced at $2,000, and the Elite package, which includes additional guided tours, is $2,500, it implies that the additional tours are valued at $500.

Therefore, the portion of the Elite package price that should be assigned to the basic Bahama Get-Away must logically be the original price of the Get-Away package, which is $2,000 or option (b). This allocation assumes that the basic package components remain unchanged in the Elite package, and the only difference is the addition of extra services valued at $500.