Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. paul heun, president of concrete always, agrees to

Paul Heun, president of Concrete Always, agrees to construct a concrete cart path at Dakota...

50.1K

Verified Solution

Question

Accounting

image
Paul Heun, president of Concrete Always, agrees to construct a concrete cart path at Dakota Golf Club. Concrete Always enters into 3 contract with Dakota to construt the path for $208,000. In addition, as part of the contract, a performance bonus of $41,600 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $10,400 per week for every week beyond the agreed-upon completion date. Paul has been irvolved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Paul estimates, given the constraints of his schedule related to other jobs, that there is 55% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 15% probability. that he will be 2 weeks late. (a) Determine the transaction price that Concrete Always should compute for this agreement. Transaction price

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students