Question

Minarski Electronics sells computers and provides hardware maintenance services. On April 1^st, 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 $822 and the one-year unlimited maintenance/repair service costs $378. How much revenue does Minarski Electronics recognize for the month ended April 30^th, assuming that revenue is accrued monthly?

Multiple Choice

• $1,000

• $31.50

• $853.50

• $711.25

Answer 1

Total cost if sold separately = 822 + 378 = 1200

% of Computer = 822/1200 = 68.5%

% of maintenance = 378/1200 = 31.5%

Revenue to be recognized for the month for computer

= 1,000 * 68.5% = 685

Revenue to be recognized for the month for maintenance service costs

= (31.5% * 1000)/12

= 315/12 = 26.25

Total amount to be recognized = 685 + 26.25

= 711.25 (Option D