TopTel Co provides a bundled-service package to J. Willis for $2000 upfront. The service package includes:
-upfront advice
-'on-call' advice
-database access for a 1-year period.
If each service was sold separately to J. Willis the fees would be:
-Up-front advice: $400
-On-call advice : $1800
-Database access: $600
Using the relative fair value approach, the amount of revenue recognised in relation to the database access is (rounded to the nearest whole dollar):

Question

TopTel Co provides a bundled-service package to J. Willis for $2000 upfront. The service package includes: 
-upfront advice
-'on-call' advice
-database access for a 1-year period.
If each service was sold separately to J. Willis the fees would be:
-Up-front advice: $400
-On-call advice : $1800
-Database access: $600
Using the relative fair value approach, the amount of revenue recognised in relation to the database access is (rounded to the nearest whole dollar):

Quizplus · Accepted Answer

The relative fair value approach requires allocation of the total bundled price among the individual services based on their standalone selling prices. In this case, the total standalone selling prices of the individual services are $400 + $1800 + $600 = $2800. Therefore, the percentage of the bundled price allocated to the database access service is $600/$2800 = 21.43%. Applying this percentage to the bundled price of $2000 gives us $428.57, which rounds up to $429. Therefore, the amount of revenue recognized in relation to the database access service is $429.

TopTel Co Provides a Bundled-Service Package to J