Question

Beat Music sells pianos. Its concert piano sells for $180,000, which includes delivery, installation, and a two-year warranty that covers any product defects. In the contract, customers can choose to buy an extended three-year warranty for maintenance and repair at $2,000. Customers also have an option to upgrade plastic keys to bone keys for $10,000. The extended warranty would normally sell for $2,000, and the installation of bone keys has a stand-alone price of $10,000. Given the above, how many performance obligations exist in the contract to purchase a concert piano?

a.
0

b.
1

c.
2

d.
3

e.
4

Answer 1

D)3 Is the correct answer.....

There are obligations

• Delivery of piano
• Installation of piano
• Two year warranty of piano

This three are the obligations exist in the contract to purchase a concert piano.