Question

need the correct amounts

A franchise of automotive technicians has a contract arrangement for a rewards program with a car manufacturing company called BMC. For every $5.00 of services performed by an automotive technician at anyone of the franchise locations, the customer is awarded Car Dollars. The Car Dollars can be redeemed towards the purchase of a motor vehicle manufactured by BMC. In total the automotive technicians performed $23,000,000 worth of services in 2020. BMC have estimated the stand-alone selling price of $0.45 and for each Car Dollar awarded, the automotive technicians will pay $0.40 to the BMC for each Car Dollar awarded to its customers. (a) x Your answer is incorrect. Try again. Determine how the $23,000,000 transaction price would be allocated to the two performance obligations (the automotive services and the Car Dollars earned by the customers). (Round percentage of total selling price calculations to 1 decimal place, e.g. 15.2% and final answers to O decimal places, e.g. 125.) || 21,160,000 $0 Automotive Services 1,840,000 Car Dollars

Answer 1

Total selling price = 5 +0.45 = 5.45

Transaction price allocated to Automotive services = 23,000,000 * 5/5.45 = 21,100,917.4

Transaction price allocated to Automotive services = 23,000,000 * 0.45/5.45 = 1,899,082.6

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