For the case below, (a) determine whether Machine 1, Machine 2, and training should be accounted for as separate units or a single unit of accounting, and explain why. (6pts) (b) Allocate the total fee of $900,000 among the three deliverables. (6pts)

Company W manufactures equipment that is used to make widgets. The widget-making process involves two pieces of equipment, both of which Company W manufactures. In an arrangement with a new customer, Company W sells both pieces of equipment, along with 10 days of training for the customer's employees, for a total fee of $900,000. Title to each machine transfers upon shipment. Company W does not grant general or specific refund rights to its customers.

Company W also sells each piece of equipment separately. In addition, competitors manufacture machines that perform the same functions as Machine 1 and 2, and machines from different manufacturers are interchangeable. Company W sells Machine 1 separately for $300,000, and Machine 2 separately for $650,000. No amount of the arrangement consideration is contingent upon performance of undelivered components.

Company W sells training services separately to customers who already have equipment installed and want additional training for new employees. Company W charges $5,000 per day for training. However, not all customers purchase training, as Company W includes operating manuals with its equipment.

Company W delivers Machine 1 first, then Machine 2, then the training, using the installed machines to demonstrate the machines' functionality. Payment terms are $300,000 upon delivery of Machine 1, $500,000 upon delivery of Machine 2, and $10,000 upon providing the training.