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Too Nice Company (TNC) includes with the sale of its jumping bean machine, a 5-year warranty that covers all repairs and maintenance. The selling price
- Too Nice Company (TNC) includes with the sale of its jumping bean machine, a 5-year warranty that covers all repairs and maintenance. The selling price for the jumping bean machine and the related warranty is $1,000. A competitor sells a similar machine without any warranty for $850. TNC does not sell the warranty separately nor is it aware of any company that does. TNC estimates it will cost $120 to perform warranty work on each jumping bean machine over the 5-year warranty period. TNCs average markup on sales is 40%. In 2019, TNC sells 1,200 jumping bean machines, and incurs $22,000 total warranty cost on the 1,200 machines.
- How much revenue will be recognized from the above transaction in 2019?
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