The way in which allocation of transaction price to performance obligation should take place. Given information: Forecasted cost of bricks is $5,500. Forecasted cost of stones is $5,000. Forecasted cost of cements is $2,000. Transaction price is $15,000.

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Answer 1

Question

Chapter 8, Problem 8.14BE

To determine

The way in which allocation of transaction price to performance obligation should take place.

Given information:

Forecasted cost of bricks is $5,500.

Forecasted cost of stones is $5,000.

Forecasted cost of cements is $2,000.

Transaction price is $15,000.

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Bella Brands operates with two divisions, Aftershave and Deodorant. The Aftershave Division produces a chemical that the Deodorant Division also uses. The Aftershave Division also sells this chemical to other firms for $10 per ounce. The cost information for the Aftershave Division is as follows: Variable costs per ounce $ 6.00 Fixed costs per ounce $ 15.00 Monthly production capacity 30,000 ounces If the Aftershave Division is not operating at full capacity and is able to supply the Deodorant Division with its needs for the chemical, what is the minimum transfer price that the Aftershave Division will accept? Multiple Choice None of the choices is correct. $10.00 per ounce $6.00 per ounce $15.00 per ounce $3.00 per ounce

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Answer 2

Question

Chapter 8, Problem 8.14BE

To determine

The way in which allocation of transaction price to performance obligation should take place.

Given information:

Forecasted cost of bricks is $5,500.

Forecasted cost of stones is $5,000.

Forecasted cost of cements is $2,000.

Transaction price is $15,000.

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Answer 3

Question

Chapter 8, Problem 8.14BE

To determine

The way in which allocation of transaction price to performance obligation should take place.

Given information:

Forecasted cost of bricks is $5,500.

Forecasted cost of stones is $5,000.

Forecasted cost of cements is $2,000.

Transaction price is $15,000.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 8, Problem 8.14BE

To determine

The way in which allocation of transaction price to performance obligation should take place.

Given information:

Forecasted cost of bricks is $5,500.

Forecasted cost of stones is $5,000.

Forecasted cost of cements is $2,000.

Transaction price is $15,000.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.14BE

To determine

The way in which allocation of transaction price to performance obligation should take place.

Given information:

Forecasted cost of bricks is $5,500.

Forecasted cost of stones is $5,000.

Forecasted cost of cements is $2,000.

Transaction price is $15,000.

Answer 6

Chapter 8, Problem 8.14BE

To determine

The way in which allocation of transaction price to performance obligation should take place.

Given information:

Forecasted cost of bricks is $5,500.

Forecasted cost of stones is $5,000.

Forecasted cost of cements is $2,000.

Transaction price is $15,000.

Answer 7

Chapter 8, Problem 8.14BE

To determine

The way in which allocation of transaction price to performance obligation should take place.

Given information:

Forecasted cost of bricks is $5,500.

Forecasted cost of stones is $5,000.

Forecasted cost of cements is $2,000.

Transaction price is $15,000.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 8 - What are the primary issues involved in revenue...Ch. 8 - What is the fundamental principle underlying the...Ch. 8 - What is the fundamental principle underlying the...Ch. 8 - Prob. 8.4Q Ch. 8 - Prob. 8.5Q Ch. 8 - How is a performance obligation defined?Ch. 8 - What are the two criteria to define a good or...Ch. 8 - Prob. 8.8Q Ch. 8 - What principles regarding timing and measurement...Ch. 8 - Prob. 8.10Q

The way in which allocation of transaction price to performance obligation should take place. Given information: Forecasted cost of bricks is $5,500. Forecasted cost of stones is $5,000. Forecasted cost of cements is $2,000. Transaction price is $15,000.

Solution Summary: The author explains the expected-cost-plus-a-margin approach, which adds the cost of production, delivery cost, profit margin and any other cost if necessary.

The way in which allocation of transaction price to performance obligation should take place.

Given information:

Forecasted cost of bricks is $5,500.

Forecasted cost of stones is $5,000.

Forecasted cost of cements is $2,000.

Transaction price is $15,000.

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Chapter 8 Solutions