[Solved] Mahogany Billiards Sells Upscale Pool Tables and Related Supplies

Question 283

Mahogany Billiards sells upscale pool tables and related supplies.It sells a premium package consisting of a pool table imported from Europe,a full set of cues and balls,and on-site installation by its staff.Mahogany determines that each of these components is a performance obligation.Mahogany sells the pool table separately for $3,000 and the set of cues and balls for $1,000.The entire package is sold at $4,500.Mahogany does not offer on-site installation separately,as part of company policy.It also estimates that it incurs about $350 of compensation and other costs per each installation.Other competing vendors sell on-site installation separately for $450,on average.Mahogany typically earns a profit margin of 40% over cost,and its prices are generally 5% lower than those charged by competitors.
Required: Estimate the stand-alone selling price of the installation service using (a)the adjusted market assessment approach, (b)the expected cost plus margin approach,and (3)the residual approach.

10+ million students use Quizplus to study and prepare for their homework, quizzes and exams through 20m+ questions in 300k quizzes.


Explore our library and get Accounting Homework Help with various study sets and a huge amount of quizzes and questions


Study sets





Upload material to get free access

Upload Now Upload Now
Upload Now

Invite a friend and get free access

Upload NowInvite a friend
Invite a friend

Subscribe and get an instant access

See our plansSee our plans
See our plans