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6 January, 06:49

Accorsi & Sons specializes in selling and installing upscale home theater systems. On March 1, 2016, Accorsi sold a premium home theater package that includes a projector, set of surround speakers, and high quality leather seats, along with complete installation service, for $36,000. If sold separately, each of these goods and services would have cost $16,300 (projector), $12,100 (speakers), $8,500 (seats), and $3,100 (installation), respectively.

Required:

How much of the transaction price would be allocated to the projector, the speakers, the leather seats, and the installation service, assuming that each of these four parts of the contract is a separate performance obligation? (Round the percentage values to 2 decimal places.)

Projector-

Surround Speaker-

Leather Seats-

Installation service-

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Answers (1)
  1. 6 January, 07:05
    0
    Projector - $14,670

    Surround Speaker - $10,890

    Leather Seats - $7,650

    Installation service - $2,790

    Explanation:

    The computation of the transaction price for each four parts are shown below:

    Projector:

    = (Total cost of installation services) * (projector sale price : Total original cost)

    = ($36,000) * ($16,300 : $40,000)

    = $14,670

    Surround Speaker:

    = (Total cost of installation services) * (speaker sale price : Total original cost)

    = ($36,000) * ($12,100 : $40,000)

    = $10,890

    Leather Seats:

    = (Total cost of installation services) * (leather seats sale price : Total original cost)

    = ($36,000) * ($8,500 : $40,000)

    = $7,650

    Installation service:

    = (Total cost of installation services) * (installation service sale price : Total original cost)

    = ($36,000) * ($3,100 : $40,000)

    = $2,790

    The total original cost would be

    = $16,300 + $12,100 + $8,500 + $3,100

    = $40,000
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