Calculating Allocations for a Package Within a Package
A sales representative enters a package within a package. The following table shows an example of how Siebel Hospitality might calculate revenue allocations for this type of package. Each item in the table has a quantity of 1.
| Package Breakdown | List Price | Negotiated Price | Unit Net Price | Formula | Per Person Allocation |
|---|---|---|---|---|---|
Package Per Person 1 |
50.00 |
50.00 |
50.00 |
None |
Not applicable |
— Event Order Item |
20.00 |
Not applicable |
Not applicable |
(20/(20+25))*50 |
22.22 |
— Package Per Person 2 |
25.00 |
Not applicable |
Not applicable |
None |
Not applicable |
— — Menu Item 1 |
20.00 |
Not applicable |
Not applicable |
(20/(20+18))*((25/(20+25))*50) |
14.62 |
— — Menu Per Person |
18.00 |
Not applicable |
Not applicable |
(18/(20+18))*((25/(20+25))*50) |
13.16 |
— — — Menu Item 2 |
10.00 |
Not applicable |
Not applicable |
None |
Not applicable |
— — — Menu Item 3 |
20.00 |
Not applicable |
Not applicable |
None |
Not applicable |
To calculate the contribution percentages of the items in the child package, Siebel Hospitality first calculates the contribution percentage of the child package. Siebel Hospitality then calculates the contribution percentages of the child line items of the package to the contribution percentage of the child package. A breakdown of the calculation steps follows.
The price of Package Per Person 1 is 50.
This 50 is made up of Event Order Item and Package Per Person 2.
The per person allocation for Event Order Item out of the 50 is 22.22.
This leaves 27.78 of the 50 for Package Per Person 2.
Siebel Hospitality now determines how to allocate the 27.78 to the items in Package Per Person 2.
Siebel Hospitality determines the contribution percentage of Menu Item 1 and Menu Per Person within Package Per Person 2.
The contribution percentage of Menu Item 1 equals ((20/(20+18)).
The contribution percentage of the Menu Per Person equals (18/(20+18)).
The contribution percentages of Menu Item 1 and Menu Per Person, multiplied by 27.78, determine how much of the 27.78 to allocate to each of the respective line items.