Ask Question
BusinessBusiness
21 November, 20:03

CrayFry offers a discount on an extended warranty on its CrayFrier when the warranty is purchased at the time the fryer is purchased. The warranty normally has a price of $25, but CrayFry offers it for $20 when purchased along with a fryer. CrayFry anticipates a 60% chance that a customer will purchase the extended warranty along with the fryer. Assume CrayFry sells to 1,000 fryers with the extended warranty discount offer. What is the total stand-alone selling price that CrayFry would use for the extended warranty discount option for purposes of allocating revenue among the performance obligations in those 1,000 fryer contracts?

a.$0

b.$5,000

c.$3,000

d.$2,000

+2
Answers (1)
  1. 21 November, 20:25
    0
    The answer is: C) $3,000

    Explanation:

    The standalone selling price is the price at which the company would sell warranty separately to its customer. In this case we need to find the stand alone price of the discount option.

    We first find the difference between regular price and the discount option:

    $25 - $20 = $5

    Then we multiply by the possibility of the discount sale happening (60%) and the total number of goods sold with the discount option.

    = $5 x 60% x 1,000 fryers

    = $3,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “CrayFry offers a discount on an extended warranty on its CrayFrier when the warranty is purchased at the time the fryer is purchased. The ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
During a risk assessment, it was discovered the location where the company would like to build a data center in subject to a large number of hurricanes.
Answers (1)
On April 1, Moloney Meat Distributors sold merchandise on account to Fronke's Franks for $1,600 on Invoice 1001, terms 3/10, n/30. Payment was received in full from Fronke's Franks, less discount, on April 10.
Answers (1)
Drawing a judgmental sample a. allows researchers to use their prior knowledge about the topic. b. enlists the aid of uninformed respondents. c. results in a sample that has no researcher bias. d. ensures a representative sample. e.
Answers (1)
Consumer sovereignty is more likely to be observed in what type of economic system?
Answers (1)
Creating Community: Did Johnson use Starbucks' shared values as the cornerstone of his decision making after the arrests?
Answers (1)
New Questions in Business
All of the following are true regarding deferred revenues except: They are payments received in advance of services performed. The adjusting entry for deferred revenues increases assets and increases revenues.
Answers (1)
Exercise 16-05 a-b (Video) In Waterway Company, materials are entered at the beginning of each process.
Answers (1)
Who provides on-the-spot short term loans for up to 50 percent of an item's estimated value? Choose one answer. a. pawnbroker b. credit card c. ATM d. payday loan
Answers (1)
Check My Work (1 remaining) Motor Sports, Inc., sues A-Z Speed. Motor Sports alleges that A-Z breached (failed to perform) a contract that required A-Z to sell ten Jet Skis to Motor Sports.
Answers (1)
CableVision has been approached by the City of Mirada to run its cable operations in 2020. After negotiating with key parties, CableVision has made the following agreements:It will offer Mirada residents a basic set of 25 cable television stations
Answers (1)
Home » Business » CrayFry offers a discount on an extended warranty on its CrayFrier when the warranty is purchased at the time the fryer is purchased. The warranty normally has a price of $25, but CrayFry offers it for $20 when purchased along with a fryer.
Sign Up Forgot Password?