The Following Information Relates to Questions 16 and 17

question 24

Multiple Choice

The following information relates to questions 16 and 17
TelCo provides a bundled service offering to a customer for $3000 upfront. The services provided are as follows:
Upfront advice
'on-call' advice
Database access for a 2-year period
If TelCo were to charge a separate fee for each service if sold separately the fee would be:
Up-front advice $200
On-call advice $2600
Database access $800
-Using the relative fair value approach the amount of revenue recognised in relation to the on-call advice is:

• A) indeterminable based on the facts provided
• B) $1000
• C) $2167
• D) $2600

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Definitions:

Raw Materials

Basic materials that are used in the production of goods, finished products, or intermediate materials that are feedstock for future finished products.

Job Specifications

Detailed descriptions of the skills, knowledge, and qualifications required for a specific job.

Security Services

Services provided by companies or government agencies to ensure the safety and security of people, properties, and information.