Final Answer:
For the machine sale with "free" training and repair services:
Equipment revenue: $5,800 (full selling price)
Service revenue: $0 (included in equipment price)
Step-by-step explanation:
HEC sells the machine at its regular price of $5,800, clearly reflecting the full value of the equipment.
While the training and repair service is offered for $1,450 separately, HEC chooses to bundle it for free with the machine purchase.
This bundling strategy makes the total package more attractive to the hospital, potentially justifying the full equipment price.
Therefore, even though the service has a separate value, HEC chooses not to explicitly attribute any revenue to it in this specific transaction. The entire $5,800 received is considered equipment revenue.
Equipment: $5,800
Service: $0 (bundled with equipment)
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Complete Question
Hospital equipment company (hec) acquired several fmri machines for its inventory at a cost of $2,300 per machine. hec usually sells these machines to hospitals at a price of $5,800. hec also separately sells 12 months of training and repair services for fmri machines for $1,450. hec is paid $5,800 cash on november 30 for the sale of an fmri machine delivered on december 1. hec sold the machine at its regular price but included one year of free training and repair service.
A. For the machine sold at its regular price, but with one year of "free" training and repair service, determine the dollar amount of revenue earned from the equipment sale versus the revenue earned from the training and repair services.
Equipment: ______
Service: ______
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