primary product
First incremental product
Second incremental product
Third incremental product
Answer is Right!
Answer is Wrong!
The correct answer is C. Second incremental product.
The incremental revenue allocation method is a method of allocating revenue to products based on the amount of revenue each product contributes to the overall company revenue. The first incremental product is the product that contributes the most revenue to the company, the second incremental product is the product that contributes the second most revenue to the company, and so on.
The incremental revenue allocation method is a useful tool for companies that want to allocate revenue to products in a fair and equitable way. It is also a useful tool for companies that want to track the performance of individual products over time.
Here is a brief explanation of each option:
- A. Primary product: The primary product is the product that is the most important to the company. It is the product that generates the most revenue and/or the product that is the most profitable.
- B. First incremental product: The first incremental product is the product that contributes the most revenue to the company after the primary product.
- C. Second incremental product: The second incremental product is the product that contributes the second most revenue to the company after the primary product and the first incremental product.
- D. Third incremental product: The third incremental product is the product that contributes the third most revenue to the company after the primary product, the first incremental product, and the second incremental product.