Berry Farm produces organic tomatoes and strawberries. In June 2016, it transpor

Question

Berry Farm produces organic tomatoes and strawberries. In June 2016, it transported 125 boxes of strawberries with a price of $24 per box to the Bay Farmers’ Market. Berry Farm paid an upfront fee of $200 to present its products at the market for one week, and the market earns a 20% profit margin on each item sold, but Berry Farm is responsible for any items that remain unsold at the end of the week. Required: The market was able to sell 80 boxes of strawberries to customers.

How much revenue should Berry Farm recognize with respect to this transaction?

Explanation / Answer

Revenue should be recognised = 80 boxes x $24

...................................................= $1,920

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