VP sells the 60-inch TV separately for $1,810 and sells the remote separately for $130, and offers the entire package for $2,020. VP does not sell the installation service separately. VP is aware that other similar vendors charge $180 for the installation service. VP also estimates that it incurs approximately $130 of compensation and other costs for VP staff to provide the installation service. VP typically charges 40% above cost on similar sales.
Requried:
Calculate the stand-alone selling price of the installation service using each of the following approaches:
Stand Alone Selling Price
Adjusted market assessment
Expected cost plus margin
Residual
Answers: 1
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