Exercise 6-15 (Algo) Approaches for estimating stand-alone selling prices [LO6-6] Video Planet (VP) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with other parts of the customer's home entertainment system. VP concludes that the TV, remote, and installation service are separate performance obligations. VP sells the 60-inch TV separately for $1,830 and sells the remote separately for $140, and offers the entire package for $2,060. VP does not sell the installation service separately. VP is aware that other similar vendors charge $190 for the installation service. VP also estimates that it incurs approximately $140 of compensation and other costs for VP staff to provide the installation service. VP typically charges 30% above cost on similar sales. Required: 1. to 3. Calculate the stand-alone selling price of the installation service using each of the following approaches. Adjusted market assessment Expected cost plus margin Residual Stand-Alone Selling Price
Exercise 6-15 (Algo) Approaches for estimating stand-alone selling prices [LO6-6] Video Planet (VP) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with other parts of the customer's home entertainment system. VP concludes that the TV, remote, and installation service are separate performance obligations. VP sells the 60-inch TV separately for $1,830 and sells the remote separately for $140, and offers the entire package for $2,060. VP does not sell the installation service separately. VP is aware that other similar vendors charge $190 for the installation service. VP also estimates that it incurs approximately $140 of compensation and other costs for VP staff to provide the installation service. VP typically charges 30% above cost on similar sales. Required: 1. to 3. Calculate the stand-alone selling price of the installation service using each of the following approaches. Adjusted market assessment Expected cost plus margin Residual Stand-Alone Selling Price
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter13: Nonlinear Optimization Models
Section: Chapter Questions
Problem 5P: Jims Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demand for these two...
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