Grouper Appliance Center is an experienced home appliancedealer. Grouper Appliance Center also offers a...

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Grouper Appliance Center is an experienced home appliancedealer. Grouper Appliance Center also offers a number of servicesfor the home appliances that it sells. Assume that GrouperAppliance Center sells ovens on a standalone basis. GrouperAppliance Center also sells installation services and maintenanceservices for ovens. However, Grouper Appliance Center does notoffer installation or maintenance services to customers who buyovens from other vendors. Pricing for ovens is as follows. Ovenonly $800 Oven with installation service 850 Oven with maintenanceservices 990 Oven with installation and maintenance services 1,000In each instance in which maintenance services are provided, themaintenance service is separately priced within the arrangement at$190. Additionally, the incremental amount charged by GrouperAppliance Center for installation approximates the amount chargedby independent third parties. Ovens are sold subject to a generalright of return. If a customer purchases an oven with installationand/or maintenance services, in the event Grouper Appliance Centerdoes not complete the service satisfactorily, the customer is onlyentitled to a refund of the portion of the fee that exceeds $800.Assume that a customer purchases an oven with both installation andmaintenance services for $1,000. (b) Indicate the amount of revenuethat should be allocated to the oven, the installation, and to themaintenance contract. (Do not round intermediate calculations.Round to 2 places.

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Price Ratio Transation Price Allocation
Oven $       800       0.77 $                       1,000 $             769
Installation $         50       0.05 $                       1,000 $                48
Maintenance $       190       0.18 $                       1,000 $             183
$   1,040 $          1,000

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In: AccountingGrouper Appliance Center is an experienced home appliancedealer. Grouper Appliance Center also offers a number...Grouper Appliance Center is an experienced home appliancedealer. Grouper Appliance Center also offers a number of servicesfor the home appliances that it sells. Assume that GrouperAppliance Center sells ovens on a standalone basis. GrouperAppliance Center also sells installation services and maintenanceservices for ovens. However, Grouper Appliance Center does notoffer installation or maintenance services to customers who buyovens from other vendors. Pricing for ovens is as follows. Ovenonly $800 Oven with installation service 850 Oven with maintenanceservices 990 Oven with installation and maintenance services 1,000In each instance in which maintenance services are provided, themaintenance service is separately priced within the arrangement at$190. Additionally, the incremental amount charged by GrouperAppliance Center for installation approximates the amount chargedby independent third parties. Ovens are sold subject to a generalright of return. If a customer purchases an oven with installationand/or maintenance services, in the event Grouper Appliance Centerdoes not complete the service satisfactorily, the customer is onlyentitled to a refund of the portion of the fee that exceeds $800.Assume that a customer purchases an oven with both installation andmaintenance services for $1,000. (b) Indicate the amount of revenuethat should be allocated to the oven, the installation, and to themaintenance contract. (Do not round intermediate calculations.Round to 2 places.

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