The determination of the transaction price for this contract for Nair Corp. is as follows:
Completed by Probability:
Date Probability Bonus/Penalty Outcome
August 1, 2015 70% $150,000 $105,000 ($150,000 x 70%)
August 8, 2015 20% $50,000 -10,000
August 15, 2015 5% $50,000 -2,500
After August 15, 2015 5% $50,000 -2,500
Total expected value of performance bonus = $135,000
Contract value = $1,000,000
Total transaction price = $1,135,000 ($1,000,000 + $135,000).
<h3>What is a transaction price?</h3>
A transaction price is the amount of consideration expected to be paid or received for the exchange of goods or services.
A transaction price can vary based on timing or performance factors.
<h3>Data and Calculations:</h3>
Contract value = $1,000,000
Performance bonus = $150,000
Penalty per week in performance bonus = $50,000
The total transaction price is <u>$1,135,000</u>.
Learn more about contract transaction prices at brainly.com/question/984979
