Solution-Should any of the estimated variable consideration

Should any of the estimated variable consideration included

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Reference no: EM132758423

Question: Company X sells standard lawn mowers to Biggy Hardware (BH) for $100.

BH is Company X's largest customer. Company X offers BH the following discounts based on purchases in a calendar year:

- 1 to 999 lawn mowers: 0% discount

- 1,000 to 1,500 lawn mowers: 3% discount

- More than 1,500 lawn mowers: 5% discount

BH's purchasing pattern has been very consistent over its twenty year relationship history with Company X. Company X's management has assigned a 10% probability to a 0% discount, a 70% probability to a 3% discount and a 20% probability to a 5% discount.

Should any of the estimated variable consideration included in the transaction price be constrained?

Reference no: EM132758423

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Should any of the estimated variable consideration included

Reference no: EM132758423

Reference no: EM132758423

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