According to FASB ASC 606, a transaction price for multiple performance obligations should be allocated
A) Based on selling price from the company's competitors
B) Based on what the company could sell the goods for on a standalone basis
C) Based on forecasted cost of satisfying performance obligation
D) Based on total transaction price less residual value

Question

Quizplus · Accepted Answer

According to FASB ASC 606, when allocating a transaction price for multiple performance obligations, the price should be based on what the company could sell the goods for on a standalone basis. This means that the company should consider the price that it would typically charge if it were offering each performance obligation separately to customers. This approach allows for a more accurate and objective allocation of the transaction price to each performance obligation.

According to FASB ASC 606, a Transaction Price for Multiple