when solving : Orange Inc. offers a discount on an extended warranty on its oPhone when the warranty is purchased at the time the o
why total stand alone price = estmimated warranty units???
when solving :
Orange Inc. 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 $132, but Orange offers it for $111 when purchased along with an oPhone. Orange anticipates a 80% chance that a customer will purchase the extended warranty along with the oPhone. Assume Orange sells to 1,000 oPhones with the extended warranty 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?
Multiple Choice $111,000 $16,800 $0 $21,000
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