Spenders Company is an experienced home appliance dealer.Spenders Company also offers a number of services together with the home appliances that it sells (installation and maintenance) .Spenders Company sells dishwashers on a standalone basis, it also sells installation and maintenance service for the dishwashers.
Pricing for dishwashers is as follows:
In cases where maintenance services are provided, the maintenance service is separately priced within the arrangement at $350.Dishwashers are sold subject to a general right of return.If a customer purchases a dishwasher with installation and\or maintenance services, in the event Spenders Company does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $1,600.On January 1, 2012, Spenders Company sells 100 dishwashers to Condo Complex, Inc.a developer of high-rise condos.The dishwashers are installed and Condo Complex, Inc.purchases the dishwashers with the installation and maintenance services.The total price for the 100 dishwashers is $190,000.How much revenue should Spenders Company allocate to the maintenance services?
A) $-0-
B) $33,250
C) $35,000
D) $30,000
Correct Answer:
Verified
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