T. Wood Inc., a marketing consulting firm, entered into the following three revenue contracts in the current month.

11/14/21, 1:16 PM Quiz 5- Chapter 7 Quiz: ACCY111 Intermediate Acctg I - SECTIONS 03, 04

https://csus.instructure.com/courses/79113/quizzes/359207?module_item_id=3403112 5/6

1. The contract with Customer A requires that T. Wood provides 10 hours of consulting services at $300 per hour for the month. 2. The contract with Customer B requires that T. Wood develops an electronic promotion of the customers new product line. Payment for the services are equal to $6,000 plus 2% of the customers sales over the one-month promotion period. T. Wood estimates that there is a 30% chance of sales totaling $100,000, a 50% chance of sales totaling $150,000, and a 20% chance of sales totaling $200,000. 3. The contract with Customer C requires T. Wood to create a promotional mailing for its product in exchange for consideration of $8,000. T. Wood will receive a $500 bonus if the project is completed within 5 business days and $250 if the project is completed within 6 business days. Based on T. Woods estimate of time to complete the project and status of other projects, T. Wood estimates that the most likely amount of the bonus is $500.

Determine the total transaction price of the three revenue contracts and whether the transaction price is fixed, variable, or some combination of both.

Transaction Price Fixed Consideration Variable Consideration $19,500 $17,000 $2,500

Transaction Price Fixed Consideration

Variable Consideration $20,400 $17,000 $3,400

Transaction Price Fixed Consideration Variable Consideration $20,400 $11,000 $9,400

Transaction Price Fixed Consideration Variable Consideration $20,000 $17,500 $2,500