Problem 18-1 Vaughn Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms. Vaughn Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $496. The standalone selling price of the tablet is $238 (the cost to Vaughn Company is $184). Vaughn Company sells the Internet access service independently for an upfront payment of $306. On January 2, 2017, Vaughn Company signed 110 contracts, receiving a total of $54,560 in cash. 1. Vaughn Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $606. Vaughn Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $136. Vaughn Company signed 220 contracts for Vaughn Bundle B on July 1, 2017, receiving a total of $133,320 in cash. 2