Question
Holiday sells a 12 Days of Christmas light display set. Each of the days is represented by a lighted display that measures a minimum of
Holiday sells a 12 Days of Christmas light display set. Each of the days is represented by a lighted display that measures a minimum of 30 feet by 35 feet. Customers can buy just the displays but can also purchase installation (set-up), and an annual maintenance package. Some companies purchase the installation on an annual basis. The details of the 12 Days Displays is as follows:
Selling price of the set of light displays $82,000 (cost $56,000)
Selling price of the installation alone $ 5,000 per year (cost $1,100)
Selling price of the annual maintenance pkg. $ 900 per year (cost $200)
Selling price of the package with all three $80,000
During 2017, Holiday sold 20 packages, 6 light displays, 4 installations and 12 maintenance agreements. The installation cost is all associated with wages expense while the maintenance cost consists of 20% wages expense and 80% inventory of parts (bulbs, fuses, replacement frame parts, etc.). During 2017 85% of the installations took place and 30% of the maintenance occurred.
Prepare appropriate analysis and journal entries
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