If More Than One Performance Obligation Exists,the Total Contract Price

question 232

Multiple Choice

If more than one performance obligation exists,the total contract price:

• A)is split by referring to the stand-alone price of each part sold separately.
• B)is recognized as revenue once one of the performance obligations is satisfied.
• C)is recognized as Deferred Revenue and later recognized as Revenue when the performance obligations are satisfied.
• D)is allocated by contract,first to written contracts,then to verbal contracts,and finally to implied contracts.

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Definitions:

Time-Driven Activity-Based Costing

An approach to activity-based costing that uses simple cost drivers like the amount of time required to complete an activity, improving the costing process's simplicity and accuracy.

Tech Support Department

A division within a company responsible for addressing technological issues and providing assistance and guidance on products or services.

Capacity Analysis

The method of calculating the production capabilities required by a company to adapt to fluctuating needs for its products.

Time-Driven Activity-Based Costing

A refinement of activity-based costing that estimates costs based on the time required to complete specific activities involved in manufacturing a product or providing a service.