Solution:
A)
Transcation price = Contract price + Estimated performance bonu
= $161,000+$29,580
=$190,580
Working:
Determine the total estimated performance bonus:
Particulars | Probability | Workings | Amount | Estimated amount |
Projecct completed on time | 55% | $34,800 | $34,800 | $19,140 |
1 week late | 30% | $34,800-(8,700*1) | $26,100 | $7,830 |
2 week late | 15% | $34,800-($8.700*2) | $17,400 | $2,610 |
Total estimated performance bonus | $29,580 |
Therefore , the total estimated performance bonus is $29,580
The transcation price that "C" should compute for agreement is $190,580
2)
Transcation price = Contract price + Estimated performance bonu
=$161,000+$34,104
=$195,104
Working:
Particulars | Probability | Workings | Amount | Estimated amount |
Projecct completed on time | 92% | $34,800 | $34,800 | $32,016 |
1 week late | 8% | $34,800-(8,700*1) | $26,100 | $2,088 |
Total estimated performance bonus | $34,104 |
Therefore,the estimated performance bonus is $34,104
The transcation price is $195,104
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