T. Wood Inc., a marketing consulting firm, entered into the following three revenue contracts in the current month. 11/1

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T. Wood Inc., a marketing consulting firm, entered into
the
following three revenue contracts in the current month.
11/14/21, 1:16 PM Quiz 5- Chapter 7 Quiz: ACCY111 Intermediate
Acctg I - SECTIONS 03, 04
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5/6
1. The contract with Customer A requires that T. Wood
provides 10 hours of consulting services at $300 per hour for
the month.
2. The contract with Customer B requires that T. Wood
develops an electronic promotion of the customer’s new
product line. Payment for the services are equal to $6,000
plus
2% of the customer’s sales over the one-month promotion
period. T. Wood estimates that there is a 30% chance of sales
totaling $100,000, a 50% chance of sales totaling $150,000,
and a 20% chance of sales totaling $200,000.
3. The contract with Customer C requires T. Wood to create
a promotional mailing for its product in exchange for
consideration of $8,000. T. Wood will receive a $500 bonus if
the project is completed within 5 business days and $250 if
the
project is completed within 6 business days. Based on T.
Woods estimate of time to complete the project and status of
other projects, T. Wood estimates that the most likely amount
of
the bonus is $500.
Determine the total transaction price of the three revenue
contracts and whether the transaction price is fixed, variable,
or
some combination of both.
Transaction Price Fixed Consideration Variable
Consideration
$19,500 $17,000 $2,500
Transaction Price Fixed
Consideration
Variable
Consideration
$20,400 $17,000 $3,400
Transaction Price Fixed Consideration Variable
Consideration
$20,400 $11,000 $9,400
Transaction Price Fixed Consideration Variable
Consideration
$20,000 $17,500 $2,500