Current Attempt in Progress

Oriole 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. Oriole has the following arrangement with Blue Spruce Inc.

Blue Spruce purchases equipment from Oriole for a price of $$910,100$ and contracts with Oriole to install the equipment. Oriole charges the same price for the equipment irrespective of whether it does the installation or not. The cost of the equipment is $$643,000.$

Blue Spruce is obligated to pay Oriole the $$910,100$ upon the delivery of the equipment.

Oriole 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 Oriole 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 $$38,320$; Oriole prices these services with a $25\%$ margin relative to cost$.$

$($a$)$

Your answer is incorrect.

How should the transaction price of $$910,100$ be allocated among the performance obligations? $($Do not round intermediate calculations. Round final answers to $0$ decimal places, e$.$g$.5,275..)$

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