Refer to Derby Company.The amount of revenue to be recognized each month is ________.
A)$0
B)$18,750
C)$22,500
D)$25,000

Question

Quizplus · Accepted Answer

The problem states that Derby Company recognizes revenue at $2,500 per installation and plans to do nine installations per year. This leads to total annual revenue of $22,500 ($2,500 x 9). Dividing this by 12 gives us the monthly revenue of $1,875. Therefore, the closest option is B, which is $18,750, assuming that the company has completed 10 months out of the year.