The Cullumber Store is an experienced home appliance dealer. Cullumber Store also offers a number of services together with the home appliances that it sells. Assume that Cullumber Store sells dishwashers on a standalone basis. Cullumber Store also sells installation services and maintenance services for dishwashers. However, Cullumber Store does not offer installation or maintenance services to customers who buy dishwashers from other vendors. Pricing for dishwashers is as follows: Dishwasher only Dishwasher with installation service Dishwasher with maintenance services Dishwasher with installation and maintenance services 1,480 Dishwasher In each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $260. Additionally, the incremental amount charged by Cullumber 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 Cullumber Store does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $1,170. Installation $1,170 Calculate the amount of the revenue to allocate to the dishwasher, the installation, and the maintenance contract. (Round answers to O decimal places, e.g. 5,275.) Maintenance 1,290 $ 1,410

Accounting Information Systems
10th Edition
ISBN:9781337619202
Author:Hall, James A.
Publisher:Hall, James A.
Chapter4: The Revenue Cycle
Section: Chapter Questions
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The Cullumber Store is an experienced home appliance dealer. Cullumber Store also offers a number of services together with the
home appliances that it sells. Assume that Cullumber Store sells dishwashers on a standalone basis. Cullumber Store also sells
installation services and maintenance services for dishwashers. However, Cullumber Store does not offer installation or maintenance
services to customers who buy dishwashers from other vendors. Pricing for dishwashers is as follows:
Dishwasher only
Dishwasher with installation service
Dishwasher with maintenance services
Dishwasher with installation and maintenance services
Dishwasher
Installation
$1,170
In each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at
$260. Additionally, the incremental amount charged by Cullumber 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 Cullumber Store does not complete the service satisfactorily, the customer is
only entitled to a refund of the portion of the fee that exceeds $1,170.
Maintenance
1,290
Calculate the amount of the revenue to allocate to the dishwasher, the installation, and the maintenance contract. (Round answers to
O decimal places, e.g. 5,275.)
$
1,410
1,480
Transcribed Image Text:The Cullumber Store is an experienced home appliance dealer. Cullumber Store also offers a number of services together with the home appliances that it sells. Assume that Cullumber Store sells dishwashers on a standalone basis. Cullumber Store also sells installation services and maintenance services for dishwashers. However, Cullumber Store does not offer installation or maintenance services to customers who buy dishwashers from other vendors. Pricing for dishwashers is as follows: Dishwasher only Dishwasher with installation service Dishwasher with maintenance services Dishwasher with installation and maintenance services Dishwasher Installation $1,170 In each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $260. Additionally, the incremental amount charged by Cullumber 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 Cullumber Store does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $1,170. Maintenance 1,290 Calculate the amount of the revenue to allocate to the dishwasher, the installation, and the maintenance contract. (Round answers to O decimal places, e.g. 5,275.) $ 1,410 1,480
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