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Bright Co. contracts with customers for sales of its Product X 2.0. Bright Co. delivers...

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Accounting

Bright Co. contracts with customers for sales of its Product X 2.0. Bright Co. delivers the Product X 2.0 to its customer and provides access to an installation support line Monday through Friday. The customer is responsible for the set-up process, which is relatively simple and takes approximately ten minutes. Calls requesting support for set-up have been minimal historically. Bright Co. estimates it will provide less than one hour of support if a customer does call. Which statement is true?

a. Bright Co. must evaluate both quantitative and qualitative factors to determine if the installation support services are immaterial in the context of the contract.

b. Because one hour is quantitatively insignificant, Bright Co. can conclude that the installation support is immaterial in the context of the contract.

c. The delivery of Product X 2.0 is not a promise evaluated for revenue accounting.

d. Because the customer can receive free installation support, it is a material right.

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