Question

Wilson sells a product that involves two separate performance obligations: A set of 3 golf clubs and a computer program that teaches the basic techniques of the sport of golf. The customer gains access to the computer program through the internet with the code received on the day of purchase. Golf clubs have a separate selling price of $ 150. Wilson sells the golf clubs and teaching software as a bundle (combo) for $ 200. The teaching software is not sold separately. Wilson knows that other providers charge $ 100 for similar programming, and Wilson's prices are generally 10% lower than what those providers charge. Wilson estimates that he incurs approximately $ 65 in costs for each copy of the schedule, and typically charges 50% above the cost for similar products. Using the expected cost approach, calculate the price to be assigned of the total $ 200 for the sale of the golf clubs.

Select one:
a. $ 150.00
b. $ 121.21
c. $ 102.50
d. $ 135.00

Answer 1

Answer:

Sale price : $200

As per cost price approach sale price assigned to teaching schedule :

: $65 * 150%

= $97.50

So cost assigned to Golf Clubs

= $200 - $97.50

= $102.50

Correct answer is option C.

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