Are the Following Separate Performance Obligations: Prepayments, Quality-Assurance Warranty, Extended

question 98

Essay

Are the following separate performance obligations: prepayments, quality-assurance warranty, extended warranty, right of return? For each, indicate yes or no, and explain.

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Definitions:

Supplies Variance

The difference between the budgeted cost of supplies and the actual cost incurred.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost, which can indicate changes in market prices or issues with budgeting.

Raw Material

Basic materials that are used in the production process to manufacture goods.

Variable Overhead Rate

The rate at which variable overhead costs are allocated to each unit of production, which may vary with the level of output.