Question
Yoshi Furniture sells bed frames and mattresses. One of its products is a premium therapeutic bed set produced by Counting Sheep, which comes with a
Yoshi Furniture sells bed frames and mattresses. One of its products is a premium therapeutic bed set produced by Counting Sheep, which comes with a mattress and a bed frame. Yoshi offers a package consisting of the mattress, the frame, and on-site installation by its staff. All of these components can be sold separately, as often done by other vendors, so Yoshi concludes that these are separate performance obligations. Yoshi sells the Counting Sheep package for $3,000. The mattress and the frame are sold separately for $2,100 and $700, respectively. Other vendors in the same area typically charge $250 for on-site installation. Yoshi does not sell on-site installation separately. On average, the prices charged by Yoshi are 10% higher than those of its competitors. Yoshi estimates that it incurs about $200 of compensation and other costs to provide the installation service. The profit margin over cost is estimated to be approximately 30%. Required: Show your work 8 points Estimate the stand-alone selling price of the installation service using (a) the adjusted market assessment approach, (b) the expected cost-plus margin approach, and (c) the residual approach
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