Question

The Appliance Store is an experienced home appliance dealer. Appliance Store also offers a number of services together with the home appliances that it sells. Assume that Appliance Store sells dishwashers on a standalone basis. Appliance Store also sells installation services and maintenance services for dishwashers. However, Appliance Store does not offer installation or maintenance services to customers who buy dishwashers from other vendors. Standalone selling prices for dishwashers, installation, and maintenance are as follows. Dishwasher only Installation service Maintenance services Dishwasher with installation and maintenance services $1,250 120 240 1,560 In each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $ 320. Additionally, the incremental amount charged by Appliance Store for installation approximates the amount charged by independent third parties. Dishwashers are sold subject to a general right of return. If a customer purchases a dishwasher with installation and/or maintenance services, in the event Appliance Store does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $ 1,250 Your answer is partially correct. Indicate the amount of revenue that should be allocated to the dishwasher the installation, and to the maintenance contract. Dishwasher Installation Maintenance Total 1560

Answer 1

Required :
Indicate the amount of revenue that should be allocated to the dishwasher the installation and to the maintenance contract
Let us first determine the price of all the three services as below :
	Particulars			Amount
	Dishwasher only			1250
	Installation only			120
	maintenance service only			240
	Price of all three services			1610
Allocating amount of revenue to the dishwasher the installation and maintenance contract :
	Calculation			Amount
	Dishwasher	1250/1610*1560		1211.2
	Installation	120/1610*1560		116.3
	maintenance service	240/1610*1560		232.5
				1560