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Wilson Links Products sells a product that involves two separate performance obligations: the SwingRight golf club weight and the SwingCoach teaching software. SwingRight has a stand-alone selling price of $150. Wilson sells both the SwingRight and the SwingCoach as a package deal for $200. The SwingCoach software is not sold separately. Wilson is aware that other vendors charge $100 for similar software, and Wilson's prices are generally 10% lower than what is charged by those vendors. Wilson estimates that it incurs approximately $65 of cost per copy of the software, and usually charges 50% above cost on similar products.

-Estimate the stand-alone selling price of the software using the adjusted market assessment approach.
A) $50
B) $80
C) $90
D) $97.50

Question

The following information applies to the questions displayed below.

Wilson Links Products sells a product that involves two separate performance obligations: the SwingRight golf club weight and the SwingCoach teaching software. SwingRight has a stand-alone selling price of $150. Wilson sells both the SwingRight and the SwingCoach as a package deal for $200. The SwingCoach software is not sold separately. Wilson is aware that other vendors charge $100 for similar software, and Wilson's prices are generally 10% lower than what is charged by those vendors. Wilson estimates that it incurs approximately $65 of cost per copy of the software, and usually charges 50% above cost on similar products.

-Estimate the stand-alone selling price of the software using the adjusted market assessment approach.
A) $50
B) $80
C) $90
D) $97.50

Quizplus · Accepted Answer

Under the adjusted market assessment approach, Wilson considers the prices charged by other vendors for similar goods and adjusts them as necessary. In this case, Wilson would start with $100 charged by other vendors, and subtract 10% to estimate its own stand-alone selling price, yielding an estimate of $90.

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