Precision Equipment, Inc., specializes in designing and installing customized manufacturing equipment. On February 1, 2018, it signs a contract to design a fully automated wristwatch assembly line for $2 million, which willbe settled in cash upon completion of construction. Precision Equipment will install the equipment on the client’sproperty, furnish it with a customized software package that is integral to operations, and provide consulting services that integrate the equipment with Precision’s other assembly lines. How many performance obligations existin this contract?

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A: The journal entries have been mentioned below.

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A: The revenue is recognized when the delivery of goods or performance of service is completed.

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A:

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A:

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A:

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A:

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Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.