Final answer:
Without a clear method of allocation, it is not possible to compute the exact amount to be allocated to installation services in the multiple-deliverable arrangement between Dexter and Ray Company.
Step-by-step explanation:
When Dexter purchases equipment from Ray Company for $5,000,000 and receives installation services with an estimated fair value of $60,000 at no additional charge, the total consideration for the multiple-deliverable arrangement is the equipment price, since the installation is bundled at no separate charge. To compute the amount allocated to the installation service, you would typically use the relative fair value method. However, since the installation is provided at no charge, and you have not provided a method of allocation, we cannot accurately compute the allocation without that method. According to standard accounting practices, when the fair value of services provided (installation in this case) is known, the fair value is recognized as a portion of the total transaction value. But in this scenario, we don't have enough information to divide the transaction price between the deliverables.