Calculating Allocations for a Two-Item Package

A sales representative enters a basic package containing two items. 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	100.00	100.00	100.00	None	Not applicable
— Event Order Item	50.00	Not applicable	Not applicable	(50/(50+60))*100	45.45
— Menu Item	60.00	Not applicable	Not applicable	(60/(50+60))*100	54.55

Siebel Hospitality determines the revenue contribution percentage of each item from the list price of the item. The list price of an item divided by the total of the item list prices equals the contribution percentage of that item. Multiply this contribution percentage by the unit net price of the package to determine how much that item contributes to the price of the package.