Hepner Products enters into a contract with Tullis to sell three different products.The total price is $365,000.Each of the products is a separate performance obligation.Based on the information presented in the table,what is the standalone price of product Z using the residual approach?
A)$100,000
B)$95,000
C)$90,000
D)$85,000

Question

Hepner Products enters into a contract with Tullis to sell three different products.The total price is $365,000.Each of the products is a separate performance obligation.Based on the information presented in the table,what is the standalone price of product Z using the residual approach? 
A)$100,000 
B)$95,000 
C)$90,000 
D)$85,000

Quizplus · Accepted Answer

To find the standalone price of product Z using the residual approach, we need to subtract the standalone prices of product X and product Y from the total contract price of $365,000.

Standalone price of product X = $120,000 
Standalone price of product Y = $155,000

Residual value = $365,000 - $120,000 - $155,000 = $90,000

Therefore, the standalone price of product Z is $90,000. Hence, the correct option is C) $90,000.

Hepner Products Enters into a Contract with Tullis to Sell