Question
Velocity Cellular Services (Velocity or the Company) sells wireless services and products based on the Global System for Mobile Communications (GSM) standard. Under the GSM
Velocity Cellular Services (Velocity or the Company) sells wireless services and products based on the Global System for Mobile Communications (GSM) standard. Under the GSM standard, each subscriber is required to have an activation card to access the network; the activation card is therefore necessary for subscribers to use their cellular phones. The activation card identifies the subscriber, provides the subscriber with a unique phone number, and only works on a specific carriers network (i.e., the activation card is not interchangeable with other carrier networks).
The Power Starterpack will provide each subscriber with a new activation card and a prepaid voucher for a total nonrefundable fee of $200. By replacing the old activation card with the updated 2008 activation card, the following additional functionalities are provided:
Bluetooth-enabled technology that allows current subscribers to have wireless control of and communication between their existing cellular phone and a hands-free headset (hands-free headset is sold separately).
Technology that enables the existing cellular phone to make international phone calls. The older activation cards limited existing cellular phones to domestic calls.
Additional memory for the subscribers existing cellular phone provides storage for an additional 300 names and phone numbers.
When they purchase a Power Starterpack, subscribers are required to return the old activation card to the Company and install the new activation card in their existing cellular phones.
Also included in the purchase of the Power Starterpack is a prepaid voucher that gives the subscriber an airtime window of 360 days to use $50 worth of minutes. However, if there is no activity for a consecutive period of seven months, the subscribers account is terminated (including the assigned phone number) and no refund is given. Additional prepaid vouchers are available in $50, $100, $150, and $200 increments.
Allocate the selling price to the performance obligations. Complete the following template (Do all calculations in this spreadsheet)
Stand-Alone Allocations %
Selling Price Age Amount
a.
b.
c.
d.
Totals
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