This still doesn't jive with my recollection having been a member of BMG for many many years, so I went to the BMG site:
http://www.bmgmusic.com. The deal is 7 + 1 + 4 = 12. There is shipping and handling for each CD + tax but let's ignore the tax...
1). 7 'free': 7 * 2.79 shipping = 19.53
2) 1 regular price: 18.98 + 2.79 = 21.77
3) 4 more 'free': 4 * 2.79 = 11.16
Total: 56.42
Average cost: 56.42 / 12 = $4.37 per CD.
[Note: You DO NOT get all 12 at once - it is 3 separate shipments!]
Next month you go for their 'Buy 1 get 2 free deal':
1) 18.98 + 2.79 = 21.77
2) 2 * 2.79 = 5.58
Total : 27.35
Average cost: (52.46 + 27.35) / 15 = $5.32 per CD
Oops...average cost is creeping up...