154k views
3 votes
How much of the contract price should Maya allocate to the machine, installation, and training, respectively?

User Chrmod
by
5.2k points

1 Answer

2 votes

Answer:

I looked for the missing information and found the following:

total contract price = $920,000

individual prices:

  • machine = $800,000
  • installation = $100,000
  • training = $100,000
  • total = $1,000,000

Maya should allocate each performance obligation in the same proportion as if they were sold separately:

  • machine = ($800,000 / $1,000,000) x $920,000 = $736,000
  • installation = ($100,000 / $1,000,000) x $920,000 = $92,000
  • training = ($100,000 / $1,000,000) x $920,000 = $92,000
User Anil Purswani
by
5.9k points