AAA Company signed a contract charging a customer P600,000 to change the windows of a customer's house. The contract includes costs for materials and labor. The Company would charge P250,000 for materials if sold separately and P500,000 for labor if the customer will purchase the needed materials.
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How much of the transaction price would the company allocate to its performance obligation to provide the needed services to the customer?
provide in good accounting form
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- Carla Vista Company sells prefabricated pools that cost $87000 to customers for $136935. The sales price includes an installation fee, which is valued at $19300. The fair value of the pool is $132850. The installation is considered a separate performance obligation and is expected to take 3 months to complete. The transaction price allocated to the pool and the installation is $136935 and $19300 respectively $132850 and $19300 respectively $119565 and 17370 respectively $112073 and $24862 respectivelyCaramel Spa Company sells prefabricated pools that cost $80,000 to customers for $144,000. The sales price includes an installation fee, which is valued at $20,000. The fair value of the pool is $128,000. The installation is considered a seperate performance obligation and is expected to take 3 months to complete. The transaction price allocated to the pool and the installation isRegis Company makes the plugs it uses in one of its products at a cost of P36 per unit. This cost includes P8 of fixed overhead. Regis needs 30,000 of these plugs annually, and Orlan Company has offered to sell them to Regis at P33 per unit. If Regis decides to purchase the plugs, P60,000 of the annual fixed overhead will be eliminated, and the company may be able to rent the facility previously used for manufacturing the plugs. If the plugs are purchased and the facility rented, Regis Company wishes to realize P100,000 in savings annually. To achieve this goal, the minimum annual rent on the facility must be: O P10,000 O P40,000 O P70,000 O P190,000
- On January 1, 2018, Lego Construction Company signed a contract to build a custom garage for a customer andreceived $10,000 in advance for the job. The new garage will be built on the customer’s land. To complete thisproject, Lego must first build a concrete floor, construct wooden pillars and walls, and finally install a roof. Legonormally charges stand-alone prices of $3,000, $4,000, and $5,000, respectively, for each of these three smallertasks if done separately. How many performance obligations exist in this contract?Joe has contracted with Supplier A to provide a parking lot for $50,000. This is an example of which type of contract? Cost Plus Fixed Fee Cost Plus Award Fee Fixed Price Time and MaterialsThe James Company manufactures widgets that sell for $120 each. The company's unit cost for each widget is as follows: A company in another state has offered to purchase 1,000 widgets from James Company at a cost of $90 each. If James were to accept this special order, no additional Fixed Manufacturing Overhead costs would be incurred. Should James accept this special order? Show relevant calculations.
- Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $118,640. The seller agreed to allow a 5.00 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation cost amounted to $2,230. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $970. The loader operator is paid an annual salary of $44,100. The cost of the company's theft insurance policy increased by $1,800 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $14,200 Required: Determine the amount to be capitalized in an asset account for the purchase of the front-end loader Note: Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.A company is calculating the relevant cost of the material to be used on a particular contract. The contract requires 4,200 kgs of material H and this can be bought for $6.30 per kg. The company bought 10,000 kgs of material H some time ago when it paid $4.50 per kg. Currently 3,700 kgs of this remains in inventory. The inventory of material H could be sold for $3.20 per kg. The company has no other use for material H other than on this contract, but it could be modified it at a cost of $3.70 per kg and use it as a substitute for material J. Material J is regularly used by the company and can be bought for $7.50 per kg. What is the relevant cost of the material for the contract? A $17,210 B $19,800 C $26,460 D $30,900Tamar Builders Ltd has been asked to build a conservatory for a customer. The conservatory will require 15 hours' supervision time by a foreman who is paid £10 per hour. The foreman has spare capacity during normal working hours but it is estimated that 10 hours of the supervision will have to be undertaken outside normal working hours and will be paid at £12 per hour, Semi-skilled workers will be required for the job for 150 hours in total. The current rate per hour is £7. The business has some spare capacity, at present, and so these workers have been undertaking jobs that are normally undertaken by unskilled workers. If the semi-skilled workers are required to build the conservatory, they will be taken off the unskilled jobs that will be done by unskilled workers who are normally paid £5 per hour. However, because the unskilled workers are already fully occupied, they will do the jobs outside normal working hours at an overtime rate of £6 per hour. What is the relevant cost of…
- Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a charge for each copy made. The company uses the high-low method to analyze costs. If Markson paid $360 for 5,000 copies and $280 for 3,000 copies, how much would Markson pay if it made 7,500 copies?Cinnamon Depot bakes and sells cinnamon rolls for $1.75 each. The cost of producing 500,000 rolls in the prior year was: At the start of the current year, Cinnamon Depot received a special order for 18,000 rolls to be sold for $1.50 per roll. The company estimates it will incur an additional $1,000 in total fixed costs in order to lease a special machine that forms the rolls in the shape of a heart per the customers request. This order will not affect any of its other operations. Should the company accept the special order? (Show your work.)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 systen. 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 does not sell the installation service separately. VP is aware that other similar vendors charge $150 for the installation service. VP also estimates that it incurs approximately $100 of compensation and other costs for VP staff to provide the installation service. VP typically charges 40% above cost on similar sales. Required: 1. to 3. Calculate the stand-alone selling price of the installation service using each of the following approaches. Stand-Alone Selling Price Adjusted market…