Quebec Supercheese Company $($QSC$)$ produces many varieties of cheese that are sold in every province in Canada, mainly through large grocery stores and specialty cheese shops. The cheese is produced at its factory in Montreal and shipped across Canada using commercial refrigerated trucks that pick up the cheese at the factory loading dock. The purchasers pay for the trucking and assume responsibility for the cheese as soon$-$as the trucks pick it up at the factory. In accordance with the contract$-$based approach to revenue recognition, QSC recognizes the sale as soon as the trucks load the cheese, because control is transferred to the purchasers at this point. QSC is not happy with these arrangements because it has received many complaints from purchasers about spoilage. Even though the purchasers and their truckers have full responsibility for this spoilage, many disputes have occurred because the truckers insist the cheese is spoiled when they pick it up$.$ QSC is considering setting up its own fleet of trucks to deliver its cheese across Canada. It estimates that the additional freight costs can be regained through the higher prices it would charge for including shipping in the price. If the company makes the deliveries, the control over the cheese will not transfer until the cheese is delivered. QSC$\text{'}$s president was not happy when she learned that sales would be recognized and recorded only upon delivery to the customer, since she knew that an average of five days' sales are in transit at all times because of the distances involved. One day's sales total approximately $$100,000$ on average. The effect of this change would be an apparent drop in sales of $$500,000$ and a $$50,000$ decrease in net income in the year of the change.

Required

Respond to the president's concerns about the impact of changing the point at which the company recognizes revenue.