Cullumber Company manufactures products ranging from simple automated machinery to complex systems containing numerous

components. Unit selling prices range from $$200,000$ to $$1,500,000$ and are quoted inclusive of installation. The installation process

does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order

for the installed equipment to perform to specifications. Cullumber has the following arrangement with Ivanhoe Inc.

Ivanhoe purchases equipment from Cullumber for a price of $$1,081,100$ and contracts with Cullumber to install the

equipment. Cullumber charges the same price for the equipment irrespective of whether it does the installation or not. The

cost of the equipment is $$652,000.$

Ivanhoe is obligated to pay Cullumber the $$1,081,100$ upon the delivery of the equipment.

Cullumber delivers the equipment on June $1,2025,$ and completes the installation of the equipment on September $30,2025.$ The

equipment has a useful life of $10$ years. Assume that the equipment and the installation are two distinct performance obligations

which should be accounted for separately.

Assuming Cullumber does not have market data with which to determine the standalone selling price of the installation services. As a

result, an expected cost plus margin approach is used. The cost of installation is $$45,520$; Cullumber prices these services with a $25\%$

margin relative to cost$.$

$($a$)$

How should the transaction price of $$1,081,100$ be allocated among the performance obligations? $($Do not round intermediate

calculations. Round final answers to $0$ decimal places, e$.$g$.5,275.)$

Equipment $

Installation $

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