Clothing Warehouse Inc. sells men's formal business suits. Clothing Warehouse offers complimentary custom fitting for a purchase made in the store for a business suit with a minimum price of $180. Providing the business suit and providing the fitting service are considered separate performance obligations. Compute the allocated transaction price of a business suit and a custom fitting for the following two separate cases.

Use the adjusted market assessment approach to compute the allocated transaction price of a business suit and a custom fitting. Assume that Clothing Warehouse Inc.'s direct competitor prices its fitting services for $36 per business suit. The business suit has a standalone selling price of $180. Carry all decimals in calculations; round the final answer to the nearest dollar.

		Business Suit: $180; Fitting Services: $36
		Business Suit: $150; Fitting Services: $30
		Business Suit: $180; Fitting Services: $0
		Business Suit: $153; Fitting Services: $27

Clothing Warehouse Inc. sells men's formal business suits. Clothing Warehouse offers complimentary custom fitting for a purchase made in the store for a business suit with a minimum price of $180. Providing the business suit and providing the fitting service are considered separate performance obligations. Compute the allocated transaction price of a business suit and a custom fitting for the following two separate cases.

Use the expected cost plus a margin approach to compute the allocated transaction price of a business suit and a custom fitting. Assume that the labor and material charges for a fitting are $24 while the typical margin above cost is 35%. The business suit has a standalone selling price of $180. Carry all decimals in calculations; round the final answer to the nearest dollar.

		Business Suit: $159; Fitting Services: $21
		Business Suit: $150; Fitting Services: $30
		Business Suit: $180; Fitting Services: $0
		Business Suit: $153; Fitting Services: $27