Question

Sandhill Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms. 1. Sandhill Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $469. The standalone selling price of the tablet is $230 (the cost to Sandhill Company is $157). Sandhill Company sells the Internet access service independently for an upfront payment of $292. On January 2, 2020, Sandhill Company signed 100 contracts, receiving a total of $46,900 in cash. 2. Sandhill Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $574. Sandhill Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $145. Sandhill Company signed 220 contracts for Sandhill Bundle B on July 1, 2020, receiving a total of $126,280 in cash.

Answer 1