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Bria Furniture sells bed frames and mattresses. One of its products is a premium therapeutic bed set produced by OmniSleep, which comes with a mattress
Bria Furniture sells bed frames and mattresses. One of its products is a premium therapeutic bed set produced by OmniSleep, which comes with a mattress and a bed frame. Bria offers a package consisting of the mattress, the frame, and onsite installation by its staff. All of these components can be sold separately, as often done by other vendors, so Bria concludes that these are separate performance obligations. Bria sells the OmniSleep package for $ The mattress and the frame are sold separately for $ and $ respectively. Other vendors in the same area typically charge $ for onsite installation. Bria does not sell onsite installation separately. On average, the prices charged by Bria are higher than those of its competitors. Bria estimates that it incurs about $ of compensation and other costs to provide the installation service. The profit margin over cost is estimated to be approximately
Required:
a Estimate the standalone selling price of the installation service using the adjusted market assessment approach.
b Estimate the standalone selling price of the installation service using the expected cost plus margin approach.
c Estimate the standalone selling price of the installation service using the residual approach.
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