Diversified Industries manufactures sump-pumps. Its most popular product is called the Super Soaker, which costs $620 to manufacture and $150 to install. Diversified sells the Super Soaker directly to commercial customers for $1,200 per unit and will install the unit for an additional $200 per unit. Although the Super Soaker is its main source of revenue, Diversified also provides monthly maintenance services for the convenience of its customers, for an additional fee. Diversified outsources maintenance services at a cost of $7 an hour. Diversified also sells the Super Soaker to home improvement retailers for $1,000 a unit. Diversified had the following Super Soaker revenue arrangements during the first quarter of 20Y1: Arrangement A: Diversified sold 30 Super Soakers to a major commercial customer in a flood-prone area for a negotiated contract price of $45,000. The Super Soakers are delivered and installed on February 1, 20Y1, and full payment is made Diversified agreed to include installation and a 3-year monthly maintenance service in the contract price, in addition to the pumps. Diversified typically charges $10 per month per unit for the maintenance plan. The contractor spends 1 hour/month maintaining each unit. Arrangement B: On March 25, Diversified delivered 300 Super Soakers to Lowe's and received payment in full upon delivery. To encourage sales, Diversified offers Lowe's customers a $100 mail-in rebate. Historically, similar rebates had a 40% redemption rate. By March 31, Diversified has not received any rebates. Diversified uses the expected value method. REVENUE RECOGNITION PROCESS Complete the five steps of the revenue recognition process for each arrangement, using the table below as a guide. STEP ARRANGEMENT A ARRANGEMENT B 1. Identify the contract with Provide 30 Super Soakers, installation Provide 300 Super Soakers to Lowe's, customers. and a monthly service plan for $45,000 with a $100 mail-in rebate for $300,000 2. Identify the separate performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the separate performance obligations. (Do not round until arriving at the final answer, then round to the nearest dollar.) 5. Recognize revenue when Revenue recognized by March 31: Revenue recognized by March 31: each performance obligation is satisfied