CrayFry offers a discount on an extended warranty on its CrayFrier when the warranty is purchased at the time the fryer is purchased. The warranty normally has a price of $25, but CrayFry offers it for $20 when purchased along with a fryer. CrayFry anticipates a 60% chance that a customer will purchase the extended warranty along with the fryer. Assume CrayFry sells to 1,000 fryers with the extended warranty discount offer. What is the total stand-alone selling price that CrayFry would use for the extended warranty discount option for purposes of allocating revenue among the performance obligations in those 1,000 fryer contracts?
a.$0
b.$5,000
c.$3,000
d.$2,000
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