Nash Appliance Center is an experienced home appliance dealer. Nash Appliance Center also offers a number...

Free

60.1K

Verified Solution

Question

Accounting

Nash Appliance Center is an experienced home appliance dealer.Nash Appliance Center also offers a number of services for the homeappliances that it sells. Assume that Nash Appliance Center sellsovens on a standalone basis. Nash Appliance Center also sellsinstallation services and maintenance services for ovens. However,Nash Appliance Center does not offer installation or maintenanceservices to customers who buy ovens from other vendors. Pricing forovens is as follows.

Oven only$800
Oven with installation service870
Oven with maintenance services960
Oven with installation and maintenance services990


In each instance in which maintenance services are provided, themaintenance service is separately priced within the arrangement at$160. Additionally, the incremental amount charged by NashAppliance 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 Nash 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 $990.

(b) Indicate the amount of revenue that should beallocated to the oven, the installation, and to the maintenancecontract. (Do not round intermediate calculations.Round final answers to 2 decimal places.)

Oven

$enter a dollar amount rounded to 2 decimal places

Installation

$enter a dollar amount rounded to 2 decimal places

Maintenance

$enter a dollar amount rounded to 2 decimal places

Answer & Explanation Solved by verified expert
4.4 Ratings (578 Votes)

ANSWER

Standalone Price Ratio Transaction Price Allocated
Oven $                    800          0.78 $                     990 $       769
Installation $870-$800 $                      70          0.07 $                     990 $         67
Maintenance $                    160          0.16 $                     990 $       154
Total $                 1,030 $       990

_____________________________________________

If you have any query or any Explanation please ask me in the comment box, i am here to helps you.please give me positive rating.

*****************THANK YOU**************


Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students