Question

Minarski Electronics sells computers and provides hardware maintenance services. On April 1st, 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 30th, assuming that revenue is accrued monthly?

Answer 1

Separate cost of computer =$822

Seprate cost of one year maintenance/repair =$378

Total Separate Cost= $822+$378

Total Separate Cost=$1200

% of Computer Cost=822/1200=68.5%

% of Maintenance Cost=378/1200=31.5%

Revenue to recognized for the month of april for Computer

=%=685

Revenue to be recognized for the year maintenance service costs

==315

Revenue to be recognized for the month maintenance service costs

= $315/12 = 26.25$

Total amount to be recognized = $685 + $26.25

Total amount to be recognized=$711.25

Minakshi Electronics Revenue to recognized for the month ended april=$711.25