Z Electronics sells computers and provides hardware maintenance services. On Apr

Question

Z Electronics sells computers and provides hardware maintenance services. On April 1st, Z sold 9 package deals containing a computer and a one-year unlimited maintenance/repair service contract for the computers at a bundle price of $1,000 each. If sold separately, the computers would cost $840 each and the one-year unlimited maintenance/repair service contract costs $360 per contract. How much revenue does Z Electronics recognize for the month ended April 30th, assuming that revenue is accrued monthly?

Explanation / Answer

Total revenue received 9000 (9 package @ $ 1000 each) Revenue related t Computer 6300 (9000/1200*840) Revenue relate to 1-yr maintenance 2700 (9000/1200*360) Revenue to be reocgnized on April 30" Revenue related to computer product 6300 Revenue related to Maintenance 225 (2700 /12 months*1 month) Total revenue to be reocgnzed 6525

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