Velorine sells a customer a sorting machine and a two-year maintenance contract for a total price of 90,000. The two items are distinct performance obligations. Velorine regularly sells the machine on its own to similar customers at 80,000 and the maintenance on its own at 20,000; the list price of the machine is 95,000. Compute the amount of the transaction price allocated to the machine.
- Total contract price
- 90,000
- Observable stand-alone selling price of the machine
- 80,000
- Observable stand-alone selling price of the maintenance
- 20,000
- List price of the machine
- 95,000