Question

Minarski Electronics sells computers and provides hardware maintenance services. On April 1st, Minarski sold a package deal containing a computer and a one-year unlimited maintenance/repair service for the computer at a bundle price of $1,000. If sold separately, the computer costs $696 and the one-year unlimited maintenance/repair service costs $504. How much revenue does Minarski Electronics recognize for the month ended April 30th, assuming that revenue is accrued monthly?

Answer 1

Answer: Total revenue recognized=(580+35)=$615

Explanation:

Total value of revenue=(696+504)=$1200

Hence revenue to be recognized in April will be computed as follow:

Computer =$\frac{696}{1200}\times bundle price$

=$\frac{696}{1200}\times 1000$

=$580

Repairs  =$\frac{504}{1200}\times bundle price \times \frac{1}{12}$

=$35

Hence total revenue recognized=(580+35)=$615.