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Dapper Dan Warehouse Inc. sells men's formal business suits. Dapper Dan Warehouse offers complimentary custom fitting for a purchase made in the store for a
Dapper Dan Warehouse Inc. sells men's formal business suits. Dapper Dan Warehouse offers complimentary custom fitting for a purchase made in the store for a business suit with a minimum price of $660. 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. Round each allocated transaction price to the nearest whole dollar. a. Use the adjusted market assessment approach and assume that Dapper Dan Warehouse Inc.'s direct competitor prices its fitting services for $132 per business suit. The business suit has a standalone selling price of $660. b. Use the expected cost plus a margin approach and assume that the labor and material charges for a fitting are $88 while the typical margin above cost is 35%. The business suit has a standalone selling price of $660
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