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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?
A)$350.00
B)$388.89
C)$300.00
D)$150.00

Question

Quizplus · Accepted Answer

Under the residual method, the amount allocated to the product is the bundled price minus the fair value of the service: $450 - $150 = $300.

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