O’Hara Associates sells golf clubs, and with each sale of a full set of clubs provides complementary clubfitting services. A full set of clubs with the fitting services sells for $1,500. O’Hara estimates that it incurs$60 of staff compensation and other costs to provide the fitting services, and normally earns 30% over coston similar services. Assuming that the golf clubs and the club-fitting services are separate performance obligations, estimate the stand-alone selling price of the club-fitting services using the expected cost plus marginapproach.
O’Hara Associates sells golf clubs, and with each sale of a full set of clubs provides complementary clubfitting services. A full set of clubs with the fitting services sells for $1,500. O’Hara estimates that it incurs$60 of staff compensation and other costs to provide the fitting services, and normally earns 30% over coston similar services. Assuming that the golf clubs and the club-fitting services are separate performance obligations, estimate the stand-alone selling price of the club-fitting services using the expected cost plus marginapproach.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 18E
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O’Hara Associates sells golf clubs, and with each sale of a full set of clubs provides complementary clubfitting services. A full set of clubs with the fitting services sells for $1,500. O’Hara estimates that it incurs
$60 of staff compensation and other costs to provide the fitting services, and normally earns 30% over cost
on similar services. Assuming that the golf clubs and the club-fitting services are separate performance obligations, estimate the stand-alone selling price of the club-fitting services using the expected cost plus margin
approach.
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