Question

Help Exercise 6-3 (Algo) Allocating transaction price [LO6-4) Video Planet (VP) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP staff The installation includes programming the remote to have the TV interface with other parts of the customer's home entertainment system VP concludes that the TV remote, and installation service are separate performance obligations VP sells the 60-inch TV separately for $2.465, sells the remote separately for $145, and offers the installation service separately for $290. The entire package sells for $2,800 Required: How much revenue would be allocated to the TV, the remote, and the installation service? (Do not round intermediate calculations.) Item Description Allocated Revenue TV Remote Installation Total revenue < Prey 2 of 12 Next >

Answer 1

rate positively ..

	Individual price	weight	Allocated revenue
TV	2465	85.00%	2380	2800*85%
Remote	145	5.00%	140	2800*5%
Installation	290	10.00%	280	2800*10%
Total	2900
Allocation of package price to each component
	Allocated revenue
TV	2380
Remote	140
Installation	280
Total	2800