Ans:
(a) Estimate the stand-alone selling price of the installation service using the adjusted market assessment approach.
Installation charges of other vendors $300
Add; Adjustment on market price (10%) 30
Total price to be charged $330
(b) Estimate the stand-alone selling price of the installation service using the expected cost plus margin approach.
Cost of installation $150
Add: Profit Margin on cost (30%) 45
Total cost $195
(c) Estimate the stand-alone selling price of the installation service using the residual approach.
Total Package cost $4,100
Less: Cost of mattress and the frame(2550+1400) $3950
Installation cost $ 150
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