Answer:
$915,000
Explanation:
The computation of the transaction price based on the expected value approach is presented below:
The formula is
= (Building cost of warehouse + bonus) × probability percentage
Date Calculation Amount
July 31, 2021 ($870,000+$50,000) × 0.65 $598,000
August 7, 2021 ($870,000+$40,000) × 0.25 $227,500
August 14, 2021 ($870,000+$30,000) × 0.05 $45,000
August 21, 2021 ($870,000+$20,000) × 0.05 $44,500
Total $915,000
Since the bonus is reduced $10,000 each week so $10,000 is subtracted for every delayed week
