Question - Green View Corporation (GVC) enters into a contract to sell four products (A, B, C and D) for a total transaction price of $500,000. Each product is properly classified as a separate performance obligation. GVC only sells products A and B on an individual basis, thus it must estimate the standalone selling prices for product C and D. Information on these four products follows:
|
Product
|
Standalone selling price
|
Forecasted cost
|
Market competitor price
|
|
A
|
$100,000
|
$80,000
|
$108,000
|
|
B
|
200,000
|
166,000
|
206,000
|
|
C
|
Not available
|
82,000
|
102,000
|
|
D
|
Not available
|
72,000
|
94,000
|
|
Total
|
|
$400,000
|
$510,000
|
How should GVC allocate the transaction price to the four products using the residual approach?