Hepner Products Enters into a Contract with Tullis to S

question 90

Multiple Choice

Hepner Products enters into a contract with Tullis to s ell three different products.The total price is $350,000.Each of the products is a separate performance obligation.Based on the information presented in the table,what is the allocated transaction price of product Z using the expected-cost-plus-a-profit margin approach?

• A)$99,167
• B)$164,700
• C)$75,000
• D)$140,300

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Definitions:

Long-Term Liabilities

Obligations due to be paid or settled beyond one year, including loans, bonds, lease obligations, and pension obligations.

Total Liabilities

The sum of all financial obligations a company owes to outside parties, including debts and other financial commitments.

Shareholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities; also known as stockholders' equity.

Equity Multiplier

A financial leverage ratio that measures the portion of a firm's assets that is financed by stockholder's equity.