Question

A company enters into a contract to sell 50 products to a customer for $30 each. After the company transfers 30 of the 50 products, the customer wants an additional 25 products. The contract is modified and the additional 25 products are priced at $15 each, a price that is not reflective of the standalone selling price. What is the price per product for the remaining 45 products (20 products from the original contract and 25 products from the modification)

Answer 1

(20/45 x $30) + (25/45 x $15) = $21.66

Step-by-step explanation:

Since the contract is modified and the additional 25 products are priced at $15 each, a price that is not reflective of the standalone selling price.

Therefore the price will be shown as a blending of the existing price of $30 because it is not entirely a new contract but a modification

The price per product for the remaining 45 products (20 products from the original contract and 25 products from the modification) will be:

(20/45 x $30) + (25/45 x $15) = $21.66

Answer 2

Answer: $975

Step-by-step explanation:

20 products from original contract

=$30 X 20 = $600

25 product from the modification

= $15 X 25 = $375

$600 + $375 = $975