Question: Please show work. 6. A music store has a special. If you already own a high end saxophone, they will sell you a pair of

 Please show work. 6. A music store has a special. If

Please show work.

6. A music store has a special. If you already own a high end saxophone, they will sell you a pair of saxophone mouthpieces, a pair of ligatures, and an extended service plan for your existing saxophone for $1200. They currently offer the pair of mouthpieces for $600, and the pair of ligatures for $200, and the service plan for $800. The competition offers a similar service plan for $1200. These are lucrative contracts, since on average it entails only $300 of labor, and the store usually has a 50% margin. Based on this data and what you know about the different ways to price separate performance obligations in a basket purchase, which of the following is NOT a possible amount to record as the transaction price for the service plan? A. $400 B. $432 C. $520 D. $600 E. $720

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