Allocation of Variable Consideration. Green-Up Inc contracts with a building manager to provide goods and services to enhance energy efficiency It offers consulting services, including recommending ways to increase energy efficiency and monitor performance It also provides items such as thermostats and automatic light switches as part of the contract Green-Up charges 60% of the reduction in energy usage during the first year as a consulting fee Green-Up determines that the consulting services compose one performance obligation and the items provided are another performance obligation The estimated standalone selling prices are $180,000 for the consulting services and $100,000 for the items to increase energy efficiency The stated price in the contract for the items provided is a fixed payment of $100,000 The price stated for the consulting fees is 60% of the customer s reduction in future energy costs Green-Up estimates the variable consideration for the consulting services to be $180,000 What amount of the transaction price should Green-Up allocate to each performance obligation?

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Chapter 8 Solutions
Intermediate Accounting
- A proposed project has estimated sale units of 3,200, give or take 3 percent. The expected variable cost per unit is $9.45 and the expected fixed costs are $21,800. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $3,750. The sale price is estimated at $14.20 a unit, give or take 2 percent. The company bases its sensitivity analysis on the expected case scenario. If a sensitivity analysis is conducted using a variable cost estimate of $9.80, what will be the total annual variable costs?arrow_forwardHow does operational efficiency measurement differ from financial metrics? (a) Process effectiveness indicators complement cost measures (b) Financial data tells complete story (c) Efficiency remains constant (d) Standard metrics work everywhere. MCQarrow_forwardFor the month ended February 29, 2024, Carlisle Solutions reported revenues of $48,500, expenses of $51,800, and dividends of $3,900. Carlisle Solutions experienced a net income or net loss of what amount?arrow_forward
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