Question

On July 10, Boogie Footware agrees to a contract to sell 800 pair of flapper shoes for $16,000 to Twenties, Inc. On September 1, after 500 pair of have been delivered, Boogie and Twenties modify the agreement to reduce the price of the remaining 300 pair of flapper shoes to $10 a pair. During September, Boogie delivers 200 pairs of shoes. How much revenue will Boogie recognize for the month of September?
A) $1, 375
B) $2,000
C) $1,625
D) $3,000

Answer 1

Answer:

B) $2,000

Explanation:

The revenue to be recognized in September will be dependent on the quantity sold during the month and the unit cost of each item as agreed in the contract. The product of the unit cost of a pair  and the number of units delivered.

Given that Boogie delivers 200 pairs of shoes at $10 per pair, the total revenue to be recognized

= 200 * $10

= $2,000