Help Save & Exit Submit Minarski Electronics sells computers and provides hardwa

Question

Help Save & Exit Submit Minarski Electronics sells computers and provides hardware maintenance services. On April 1st, Minarski sold a package deal containing a r service for the computer at a bundle price of $1,000. If sold separately the computer does Minarski Electronics recognize for computer and a one-year unlimited costs $840 and the one-year unlimited maintenance/repair service costs $360 How much revenue the month ended April 30th assuming that revenue is accrued monthly? 0217.10 $1,000 O $725 O $870

Explanation / Answer

Answer is $725

Explanation:

Total Rrevenue when individually sold:

Computer: $ 840

Warranty:    $360

Total sales: $1200

Sold as a package: $1000 (to approtioned among both in 840:360 ratio)

Therfore,

Revenue apportioned to computer: 840 /1200 *1000 = $700 (which has to be fully recognized)

Revenue from warranty: 360 /1200 *1000 = $ 300 (which need to be apportioned for months of warranty expired i.e. 1 month)

Therefore, the revenue to be recognized:

Sale of computer:                                                 $700

Revenue of warranty for one month (300*1/12): $ 25

Total revenue to be reocgnized:                            $725

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