Business, 11.07.2021 23:30 sierram298

Thomas Consultants provided Bran Construction with assistance in implementing various cost-savings initiatives. Thomas’s contract specifies that it will receive a flat fee of $63,000 and an additional $33,000 if Bran reaches a prespecified target amount of cost savings. Thomas estimates that there is a 25% chance that Bran will achieve the cost-savings target. Required:
1. Assuming Thomas uses the expected value as its estimate of variable consideration, calculate the transaction price.
2. Assuming Thomas uses the most likely value as its estimate of variable consideration, calculate the transaction price.
3. Assume Thomas uses the expected value as its estimate of variable consideration, but is very uncertain of that estimate due to a lack of experience with similar consulting arrangements. Calculate the transaction price.

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Answer from: ssalusso7914

Thomas Consultants

1. Assuming Thomas uses the expected value as its estimate of variable consideration, the transaction price is:

= $71,250

2. Assuming Thomas uses the most likely value as its estimate of variable consideration, the transaction price is:

= $96,000

3. Assume Thomas uses the expected value as its estimate of variable consideration, but is very uncertain of that estimate due to a lack of experience with similar consulting arrangements, the transaction price is:

= $63,000

Explanation:

a) Data and Calculations:

Contract's flat fee = $63,000

Additional fee based on achievement of cost-saving target = $33,000

Estimated probability of achieving cost-savings target = 25%

1. Assuming Thomas uses the expected value as its estimate of variable consideration, the transaction price is:

= $63,000 + ($33,000 * 25%)

= $63,000 + $8,250

= $71,250

2. Assuming Thomas uses the most likely value as its estimate of variable consideration, the transaction price is:

= $63,000 + $33,000

= $96,000

= $63,000

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$527.7.if the following was the question $527.7 is the answer.students who are trying to raise funds have an agreement with a local pizza chain. the chain has agreed to sell them pizzas at a discount, which the students can then resell to families in the local community for a profit. it is expected that of the 500 families in the community, at most 70% will buy pizza. based on a survey of their personal preferences, the students believe that they should order no more than 120 cheese pizzas, no more than 150 pepperoni pizzas, and no more than 100 vegetarian pizzas. they also want to make sure that at least 20% of the total pizzas are cheese and at least 50% of the pizzas are pepperoni. they make a profit of $1.45, $1.75, and $1.98, respectively, for each cheese, pepperoni, and vegetarian pizza they resell. how many pizzas of each type should they buy?

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