Video Planet (\"VP\") sells a big screen TV package consisting of a 60-inch plas

Question

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 $2,295, sells the remote separately for $325, and offers the installation service separately for $270. The entire package sells for $2,600.

TV:
Remote:
Installation:
Total revenue:

Explanation / Answer

ALLOCATION OF REVENUE :

Seprate revenue Total package revenue allocation TV 2295 2600*2295/2890 2065 Remote 325 2600*325/2890 292 Installation 270 2600*270/2890 243 Total revenue 2890 2600

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