Mike Jones spends five days in a local private not-for-profit hospital. The hospital charges him $170,000 for the services. His insurance company has contracts with the hospital that will lower the amount that has to be paid. The hospital believes it has a 60 percent chance that the reduction will be $70,000 and a 40 percent chance that the reduction will be $100,000. The hospital applies the expected amount method to variable consideration. What amount of revenue should be reported?

Correct answer is $88,000.

Please give clear steps how to get $88,000