?? Accounting Problem: Cost allocationLaila Pool Company sells prefabricated pools that cost $100,000 to customers for$180,000. The sales price includes an installation fee, which is valued at $25,000.The fair value of the pool is $160,000. The installation is considered a separateperformance obligation and is expected to take 3 months to complete.The transaction price allocated to the pool and the installation isa. $150,986 and $22,124 respectivelyb. $160,000 and $25,000 respectivelyc. $180,000 and $25,000 respectivelyd. $138, 378 and $21,622 respectivelye. $155,676 and $24,324 respectively

Explanation of Fair Value:Fair value refers to the price that would be received to sell an asset or…

Answered: Accounting Problem: Cost allocation…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

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Chapter2: Building Blocks Of Managerial Accounting

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Problem 12EB: Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month...

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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 respectively
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Caramel 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 is
ok t M ences Thomas Consultants provided Bran Construction with assistance in implementing various cost-savings initiatives. Thomas's contract specifies that it will receive a flat fee of $68,000 and an additional $38,000 if Bran reaches a prespecified target amount of cost savings. Thomas estimates that there is a 20% chance that Bran will achieve the cost-savings target. Required: 1. Assuming Thomas uses the expected value as its estimate of variable consideration, calculate the transaction price. 2. Assuming Thomas uses the most likely value as its estimate of variable consideration, calculate the transaction price. 3. Assume Thomas uses the expected value as its estimate of variable consideration, but is very uncertain of that estimate due to a lack of experience with similar consulting arrangements. Calculate the transaction price. 1. Using expected value 2. Using most likely value 3. Using expected value but uncertain Transaction Price
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Leo Consulting enters into a contract with Highgate University to restructure Highgate's processes for purchasing goods from suppliers. The contract states that Leo will earn a fixed fee of $22,000 and earn an additional $4,000 if Highgate achieves $40,000 of cost savings. Leo estimates a 60% chance that Highgate will achieve $40,000 of cost savings. Assuming that Leo determines the transaction price as the expected value of expected consideration, what transaction price will Leo estimate for this contract?
Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month plus a charge for each mile driven. Able Transport drove the bus 7,000 miles and paid a total of $1,360 in June. In October. Able Transport paid $1,280 for the 5,000 miles driven. If Able Transport uses the high-low method to analyze costs, how much would Able Transport pay in December, if they drove 6,000 miles?
Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?
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?
Accepting business at a special price Box Elder Power Company expects to operate at 85% of productive capacity during May. The total manufacturing costs for May for the production of 40,000 batteries are budgeted as follows: The company has an opportunity to submit a bid for 5,000 batteries to be delivered by May 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during May or increase the selling or administrative expenses. What is the unit cost below which Box Elder Power Company should not go in bidding on the government contract?

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