Question
In: Accounting
Video Planet (“VP”) sells a big screen TV package consisting of a 60-inch plasma TV, a...
Video Planet (“VP”) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with other parts of the customer’s home entertainment system. VP concludes that the TV, remote, and installation service are separate performance obligations. VP sells the 60-inch TV separately for $2,295, sells the remote separately for $135, and offers the installation service separately for $270. The entire package sells for $2,600. Required: How much revenue would be allocated to the TV, the remote, and the installation service?
Solutions
Expert Solution
Based on the information available in the question, we can calculate the revenue to be abllocated to the TV, the remote and the installation service as follows:-
| Particulars | Fair Market Value | % of Fair Market Value | Package Price | Revenue Allocation |
| TV | 2,295 | 85.00% | 2,600 | 2,210 |
| Remote | 135 | 5.00% | 2,600 | 130 |
| Installation service | 270 | 10.00% | 2,600 | 260 |
| Total | 2,700 | 2,600 |
The percentage of fair market value for each item is obtained by :-
(Fair market value of the product/Total Fair market value) . Example :- For TV , it is $2,295/$2,700 = 85%
Please let me know if you have any questions via comments and all the best :)
ekkarill92 answered 2 years agoRelated Solutions
Video Planet ("VP") sells a big screen TV package consisting of a 60-inch plasma TV, a...
Video Planet ("VP") sells a big screen TV package consisting of
a 60-inch plasma TV, a universal remote, and on-site installation
by VP staff. The installation includes programming the remote to
have the TV interface with other parts of the customer’s home
entertainment system. VP concludes that the TV, remote and
installation service are separate performance obligations. VP sells
the 60-inch TV separately for $1,850 and sells the remote
separately for $150, and offers the entire package for $2,100. VP...
Video Planet (VP) sells a big screen TV package consisting of a 60-inch plasma TV, a...
Video Planet (VP) sells a big screen TV package consisting of a
60-inch plasma TV, a universal remote, and on-site installation by
VP staff. The installation includes programming the remote to have
the TV interface with other parts of the customer’s home
entertainment system. VP concludes that the TV, remote, and
installation service are separate performance obligations. VP sells
the 60-inch TV separately for $1,750 and sells the remote
separately for $100, and offers the entire package for $1,900. VP...
Video Planet (VP) sells a big screen TV package consisting of a 60-inch plasma TV, a...
Video Planet (VP) sells a big screen TV package consisting of a
60-inch plasma TV, a universal remote, and on-site installation by
VP staff. The installation includes programming the remote to have
the TV interface with other parts of the customer’s home
entertainment system. VP concludes that the TV, remote, and
installation service are separate performance obligations. VP sells
the 60-inch TV separately for $1,910 and sells the remote
separately for $180, and offers the entire package for $2,220. VP...
Giant Screen TV, Inc., is a Miami-based importer and distributor of 60-inch screen HDTVs for residential...
Giant Screen TV, Inc., is a Miami-based importer and distributor
of 60-inch screen HDTVs for residential and commercial customers.
Revenue and cost relations are as follows:
TR = $4,500Q - $0.1Q2
TC = $2,000,000 + $1500Q + $0.5Q2
Calculate output, price and profit at the average
cost-minimizing activity level.
Calculate output, price and profit at the profit-maximizing
activity level.
Calculate the level of output and price that will maximize
sales revenue. What is the profit associated with this activity
level?...
TV Circuit has 30 large-screen televisions in a warehouse in Erie and 60 large-screen televisions in...
TV Circuit has 30 large-screen televisions in a warehouse in
Erie and 60 large-screen televisions in a warehouse in Pittsburgh.
Thirty-five are needed in a store in Blairsville, and 40 are needed
in a store in Youngstown. It costs $17 to ship from Pittsburgh to
Blairsville and $24 to ship from Pittsburgh to Youngstown, whereas
it costs $18 to ship from Erie to Blairsville and $27 to ship from
Erie to Youngstown. How many televisions should be shipped from
each...
Building a new factory to produce 50- and 60-inch TV screens can cost $4 billion. But...
Building a new factory to produce 50- and 60-inch TV screens can
cost $4 billion. But for more than ten years, manufacturers of
these screens have continued to build new plants. By building so
many plants, they have expanded productive capacity at a rate that
has exceeded the demand for big-screen TVs. In fact, during one
recent year, the supply of big-screen TVs was estimated to exceed
demand by 12%, rising to 16% in the future. One state-of-the-art
plant built...
Studd Enterprises sells big-screen televisions. A concern of management is the number of televisions sold each...
Studd Enterprises sells big-screen televisions. A concern of
management is the number of televisions sold each day. A recent
study revealed the number of days that a given number of
televisions were sold.
# of TV units sold # of
days
0
2
4
18
12
10
4
Answer the questions below. For each part, show your
calculations and/or explain briefly how you arrived at your answer,
as appropriate or needed.
Required:
Convert the frequency distribution above into...
QUESTION 1 (15 marks) Studd Enterprises sells big-screen televisions. A concern of management is the number...
QUESTION 1
Studd Enterprises sells big-screen televisions. A concern of
management is the number of televisions sold each day. A recent
study revealed the number of days that a given number of
televisions were sold.
# of TV units sold # of
days
0
2
4
10
12
8
4
Answer the questions below. For each part, show your
calculations and/or explain briefly how you arrived at your answer,
as appropriate or needed.
Required:
Convert the frequency distribution...
QUESTION 1 (15 marks) Studd Enterprises sells big-screen televisions. A concern of management is the number...
QUESTION 1
Studd Enterprises sells big-screen televisions. A concern of
management is the number of televisions sold each day. A recent
study revealed the number of days that a given number of
televisions were sold.
# of TV units sold # of
days
0
2
4
18
12
10
4
Answer the questions below. For each part, show your
calculations and/or explain briefly how you arrived at your answer,
as appropriate or needed.
Required:
Convert the frequency distribution above into...
QUESTION 1 (15 marks) Studd Enterprises sells big-screen televisions. A concern of management is the number...
QUESTION 1
Studd Enterprises sells big-screen televisions. A concern of
management is the number of televisions sold each day. A recent
study revealed the number of days that a given number of
televisions were sold.
# of TV units sold # of
days
0
2
4
10
12
8
4
Answer the questions below. For each part, show your
calculations and/or explain briefly how you arrived at your answer,
as appropriate or needed.
Required:
Convert the frequency distribution...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella Co.,...
- Parallel Arrays This question is in MindTap Cengage Summary In this lab, you use what you...
- 5. You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella...
- JAVA Write a test program that prompts the user to enter a series of integers and...
- (2) Cite an example on how organizations like Google, Facebook, Youtube etc collect data for image...
- The legal landscape is perpetually changing. Psychologists must remain abreast of these changes to avoid potentially...
- We are evaluating a project that costs $1.68 million, has a six-year life, and has no...
ADVERTISEMENT