Sandhill Center is an experienced home appliance dealer. Sandhill Center also offers a number of services for the home appliances thatit sells. Assume that Sandhill Center sells ovens on a standalone basis. Sandhill Center also sells installation services and maintenanceservices for ovens. However, Sandhill Center does not offer installation or maintenance services to customers who buy ovens fromother vendors. Pricing for ovens is as follows.Oven onlyOven with installation service$790860Oven with maintenance services990Oven with installation and maintenance services954In each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at$200. Additionally, the incremental amount charged by Sandhill Center for installation approximates the amount charged byindependent third parties. Ovens are sold subject to a general right of return. If a customer purchases an oven with installation and/ormaintenance services, in the event Sandhill Center does not complete the service satisfactorily, the customer is only entitled to arefund of the portion of the fee that exceeds $790.Assume that a customer purchases an oven with both installation and maintenance services for $954. Based on its experience, SandhillCenter believes that it is probable that the installation of the equipment will be performed satisfactorily to the customer. Assume thatthe maintenance services are priced separately (i.e., the three components are distinct).(b) Indicate the amount of revenue that should be allocated to the oven, the installation, and to the maintenance contract. (Do not roundintermediate calculations. Round final answers to O decimal places, e.g. 5,275.)Oven$+A691Installation$860MaintenanceSA990

The revenue should be allocated to the goods and services based on their standard price to the total…

Sandhill Center is an experienced home appliance dealer. Sandhill Center also offers a number of services for the home appliances that it sells. Assume that Sandhill Center sells ovens on a standalone basis. Sandhill Center also sells installation services and maintenance services for ovens. However, Sandhill Center does not offer installation or maintenance services to customers who buy ovens from other vendors. Pricing for ovens is as follows. Oven only Oven with installation service $790 860 Oven with maintenance services 990 Oven with installation and maintenance services 954

Sandhill Center is an experienced home appliance dealer. Sandhill Center also offers a number of services for the home appliances that it sells. Assume that Sandhill Center sells ovens on a standalone basis. Sandhill Center also sells installation services and maintenance services for ovens. However, Sandhill Center does not offer installation or maintenance services to customers who buy ovens from other vendors. Pricing for ovens is as follows. Oven only Oven with installation service $790 860 Oven with maintenance services 990 Oven with installation and maintenance services 954

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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