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Pet Lodge Inc., which offers day and overnight kennel services for pets, is offering a promotion for new customers signing a contract: purchase 3 overnight
Pet Lodge Inc., which offers day and overnight kennel services for pets, is offering a promotion for new customers signing a contract: purchase 3 overnight stays, a 10-visit day pass punch card, and a new leash for $312. The total transaction price of $312 is stated to the customer as $108 for the overnight stay, $180 for the punch card, and $24 for the leash. Allocate the $312 transaction price under the following separate scenarios. Note: Carry all decimals in calculations; round the final answer to the nearest dollar. a. The three items (overnight stays, day pass punch card, and leash) are sold separately by Pet Lodge Inc. The standalone selling prices of the overnight stays, day pass punch card, and a new leash are $108, $180, and $24, respectively. Transaction Standalone Performance Price Selling Allocated Transaction Price Obligations as Stated Price (rounded) Overnight stay $ $ $ 10-visit pass Leash $ b. The three items (overnight stays, day pass punch card, and leash) are sold separately by Pet Lodge Inc. The standalone selling prices of the overnight stays, day pass punch card, and leash are $126, $216, and $30, respectively Performance Obligations Allocated Transaction Standalone Price Selling Transaction Price as Stated Price (rounded) $ $ Overnight stay $ 10-visit pass Leash $ $ c. Two of the three items (overnight stay and day pass punch card) are sold separately by Pet Lodge Inc. The standalone selling prices of the overnight stays and day pass punch card are $108 and $180, respectively. Because Pet Lodge Inc. has never sold leashes prior to this promotion, Pet Lodge Inc. determined the average selling price of similar leashes in the market place to be $30. Performance Obligations Transaction Standalone Price as Stated $ Selling Price Allocated Transaction Price (rounded) $ Overnight stay $ 10-visit pass Leash $ d. Two of the three items (overnight stays and day pass punch card) are sold separately by Pet Lodge Inc. The standalone selling prices of the overnight stays and day pass punch card are $108 and $180, respectively. Pet Lodge Inc. purchased the leashes for $18 each and expects a gross profit margin of 50%. Performance Obligations Transaction Standalone Allocated Price as Stated Selling Price Transaction Price (rounded) Overnight stay $ $ $ 10-visit pass Leash e. Two of the three items (overnight stays and day pass punch card) are sold separately by Pet Lodge Inc. The standalone selling prices of the overnight stays and day pass punch card are $108 and $180, respectively. Pet Lodge Inc. has never sold leashes prior to this promotion, and is not able to obtain a reliable comparable market price because the leashes are unique and there is nothing comparable on the market. Allocated Transaction Standalone Performance Price Selling Transaction Price Obligations as Stated Price (rounded) Overnight stay $ $ $ 10-visit pass Leash
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