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The total sales of goods to Pending is $16m. This is a revenue for current year or three years?
The total supporting cost to this sales of goods is $3.6m (1.2m x 3). From the profit margin of 40% the total revenue of such service should be $6m ($3.6m/0.6). From the answer in the book, $4m should be deducted from the total sales of $16m to account for 2 year deferred revenue. My question is, has this $6m service revenue been included in the total sales revenue of $16m?
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