Question

(1 pt.) Bell, Inc. buys 1,000 computer game CDs from a distributor who is discontinuing those games. The purchase price for the lot is $8,000. Bell will group the CDs into three price categories for resale, as indicated below: Group No. of CDs Price per CD 1 100 $5 2 800 10 3 100 15 Instructions: Determine the cost per CD for each group, using the relative sales value method. CDs

Answer 1

Answer:$4, $8, $12

Explanation: we will first find the sales value of each CD price group

Group CD1= 100x5/(100x5+800x10+10015) = $500/$10,000= 0.05X 100= 5%

Group CD 2 = 10x800/ (100x5+800x10+100x15) =$800/%10,000= 0.8X 100=80%

Group CD 3 = 100x15/(100x5+800x10+100x15)= $1500/ $10,000 = 0.15X 100%=15%

So the costs per CD are:

CD 1= 8000 X.05/100= $4.00

CD 2=8000 x 0.80/800= $8.00

CD 3= 8000x 0.15/100= $12.00