Musco Lighting manufactures emergency power equipment Its most popular generator is a model called the MegaGenerator 2 0, which has a retail price of $1,500 and costs Musco $740 to manufacture It sells the MegaGenerator 2 0 on a standalone basis directly to businesses, as well as provides installation services Musco also distributes the MegaGenerator 2 0 through a consignment agreement with Home Depot Musco has the following information related to four MegaGenerator 2 0 revenue arrangements during the first quarter of 2017 Musco entered into an arrangement with the Piggly Wiggly grocery store chain in eastern Minnesota to deliver MegaGenerator 2 0s for the meat lockers in the grocers stores Musco provides a 5 volume discount for MegaGenerator 2 0s purchased by Piggly Wiggly if at least $450,000 of MegaGenerator 2 0s are purchased during 2017 By March 31, 2017, Musco has made sales of $360,000 ($1,500 240 generators) to Piggly Wiggly Based on prior experience with this promotion in two neighboring states, the discount threshold is met for the year if more than one half of the target had been met by mid year On January 1, 2017, Musco sells 20 MegaGenerator 2 0s to Washington D C Nicks signs a 6 month note due in 6 months at an annual interest rate of 12 Musco allows Nicks to return any MegaGenerator 2 0s that it cannot use within 120 days and receive a full refund Based on prior experience, Musco estimates that three units will be returned (using the most likely outcome approach) Muscos costs to recover the products will be immaterial, and the returned generators are expected to be resold at a profit No MegaGenerator 2 0s have been returned as of March 31, 2017, and Musco still estimates that three units will be returned in the future Musco sells 30 MegaGenerator 2 0s to a hospital in the Florida Keys for a total contract price of $50,000 In addition to the MegaGenerator 2 0s, Musco also provides installation at a standalone selling price of $200 per MegaGenerator 2 0 the cost to Musco to install is $150 per MegaGenerator 2 0 The MegaGenerator 2 0s are delivered and installed on March 1, 2017, and full payment is made to Musco Musco ships 300 MegaGenerator 2 0s to Home Depot on consignment By March 31, 2017, Home Depot has sold three fourths of the consigned merchandise at the listed price of $1,500 per unit Home Depot notifies Musco of the sales, retains an 8 commission, and remits the cash due to Musco Determine net income for Musco Industries for the first quarter of 2017 You can ignore taxes Hint Determine the net income amount for each individual arrangement above and then add the four together Each scenario is worth 5 points Show your work so you can earn partial credit

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Musco Lighting manufactures emergency power equipment. Its most popular generator is a model called the MegaGenerator 2.0, which has a retail price of $1,500 and

Musco Lighting manufactures emergency power equipment. Its most popular generator is a model called the MegaGenerator 2.0, which has a retail price of $1,500 and costs Musco $740 to manufacture. It sells the MegaGenerator 2.0 on a standalone basis directly to businesses, as well as provides installation services. Musco also distributes the MegaGenerator 2.0 through a consignment agreement with Home Depot.

Musco has the following information related to four MegaGenerator 2.0 revenue arrangements during the first quarter of 2017.

Musco entered into an arrangement with the Piggly Wiggly grocery store chain in eastern Minnesota to deliver MegaGenerator 2.0s for the meat lockers in the grocers stores. Musco provides a 5% volume discount for MegaGenerator 2.0s purchased by Piggly Wiggly if at least $450,000 of MegaGenerator 2.0s are purchased during 2017. By March 31, 2017, Musco has made sales of $360,000 ($1,500 240 generators) to Piggly Wiggly. Based on prior experience with this promotion in two neighboring states, the discount threshold is met for the year if more than one-half of the target had been met by mid-year.

On January 1, 2017, Musco sells 20 MegaGenerator 2.0s to Washington D.C. Nicks signs a 6-month note due in 6 months at an annual interest rate of 12%. Musco allows Nicks to return any MegaGenerator 2.0s that it cannot use within 120 days and receive a full refund. Based on prior experience, Musco estimates that three units will be returned (using the most likely outcome approach). Muscos costs to recover the products will be immaterial, and the returned generators are expected to be resold at a profit. No MegaGenerator 2.0s have been returned as of March 31, 2017, and Musco still estimates that three units will be returned in the future.

Musco sells 30 MegaGenerator 2.0s to a hospital in the Florida Keys for a total contract price of $50,000. In addition to the MegaGenerator 2.0s, Musco also provides installation at a standalone selling price of $200 per MegaGenerator 2.0; the cost to Musco to install is $150 per MegaGenerator 2.0. The MegaGenerator 2.0s are delivered and installed on March 1, 2017, and full payment is made to Musco.

Musco ships 300 MegaGenerator 2.0s to Home Depot on consignment. By March 31, 2017, Home Depot has sold three-fourths of the consigned merchandise at the listed price of $1,500 per unit. Home Depot notifies Musco of the sales, retains an 8% commission, and remits the cash due to Musco.

Determine net income for Musco Industries for the first quarter of 2017. You can ignore taxes.

Hint: Determine the net income amount for each individual arrangement above and then add the four together. Each scenario is worth 5 points. Show your work so you can earn partial credit.