Creative Computing sells a tablet computer called the Protab. The $875 sales pri

Question

Creative Computing sells a tablet computer called the Protab. The $875 sales price of a Protab Package includes the following: • One Protab computer. • A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months. • A coupon to purchase a Creative Probook e-book reader for $180, a price that represents a 30% discount from the regular Probook price of $600. It is expected that 25% of the discount coupons will be utilized. • A coupon to purchase a one-year extended warranty for $70. Customers can buy the extended warranty for $70 at other times as well. Creative estimates that 45% of customers will purchase an extended warranty. • Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $855. Customers must pay $95 to purchase the extended warranty if they don’t purchase it with the $70 coupon that was included in the Protab Package. Creative estimates that 45% of customers will use the $70 coupon to purchase an extended warranty. Required: 1. & 2. Indicated below whether each item is a separate performance obligation and allocate the transaction price of 90,000 Protab Packages to the separate performance obligations in the contract.

Indicated below whether each item is a separate performance obligation and allocate the transaction price of 90,000 Protab Packages to the separate performance obligations in the contract.

Percentage of total

Stand Alond Price

Percentage of total Stand

Alone Price

Total Transcation

Price

Allocated Contract price

Indicated below whether each item is a separate performance obligation and allocate the transaction price of 90,000 Protab Packages to the separate performance obligations in the contract.

Explanation / Answer

Creative Computing sells a tablet computer called the Protab. The $875 sales pri

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