Question

Sufjan Company has a contract to sell 200 units to a customer for $14,000. After 140 units have been delivered, Sufjan modifies the contact by promising to deliver 30 more units for an additional $60 per unit (the standalone selling price at the time of the contract modification). What is the additional revenue to be earned after the modification

Answer 1

Answer:

$1,800

Explanation:

No. of units in a contract to sell = 200 units for $14,000

Per unit price:

= Total selling value ÷ No. of units

= $14,000 ÷ 200

= $70

After 140 units have been delivered,

Revenue from the remaining units:

= Number of units × Per unit price

= (200 units - 140 Units) × $70

= 60 units × $70

= $4,200

Revenue from the additional units:

= Number of units × Per unit price

= 30 units × $60 per unit

= $1,800