Orange Incorporated offers a discount on an extended warranty on its oPhone when the warranty is purchased at the time the oPhone is purchased. The warranty normally has a price of $168, but Orange offers it for $129 when purchased along with an ofhone Orange anticipates a 75% chance that a customer will purchase the extended warranty along with the ophone Assume Orange sells to 1000 oPhones with the extended wananty discount offer What is the total stand-alone selling price that Orange would use for the extended warranty discount option for purposes of allocating revenue among the performance obligations in those 1,000 oPhone contracts Mutiple Choice $39.000 129,250
Orange Incorporated offers a discount on an extended warranty on its oPhone when the warranty is purchased at the time the oPhone is purchased. The warranty normally has a price of $168, but Orange offers it for $129 when purchased along with an ofhone Orange anticipates a 75% chance that a customer will purchase the extended warranty along with the ophone Assume Orange sells to 1000 oPhones with the extended wananty discount offer What is the total stand-alone selling price that Orange would use for the extended warranty discount option for purposes of allocating revenue among the performance obligations in those 1,000 oPhone contracts Mutiple Choice $39.000 129,250
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Orange Incorporated offers a discount on an extended warranty on its oPhone when the warranty is purchased at the time the oPhone is purchased The warranty normally has a price of
$168, but Orange offers it for $129 when purchased along with an ofhone Orange anticipates a 75% chance that a customer will purchase the extended warranty along with the ophone
Assume Orange sells to 1,000 oPhones with the extended wananty discount offer What is the total stand-alone selling price that Orange would use for the extended warranty discount
option for purposes of allocating revenue among the performance obligations in those 1,000oPhone contracts
Mutiple Choice
O
O
$39.000
$29,250
50
$129.000
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