Understanding Destin Company's Performance Obligations in a Contract

Manufacture a new 3D printer

Destin Company's first performance obligation is to manufacture a new 3D printer as specified in the contract. This means that Destin Company is responsible for designing, assembling, and delivering a fully functional 3D printer to the client.

Installation of the 3D printer

Another performance obligation of Destin Company is to provide installation services for the 3D printer. This includes setting up the printer, calibrating it, and ensuring that it is ready for operation. The installation cost of $4,000 is part of this obligation.

Maintenance of the 3D printer over the life of the printer

Destin Company's final obligation is to provide maintenance services for the 3D printer throughout its operational life. This includes regular servicing, repairs, and technical support to ensure the printer functions smoothly. The cost of the maintenance agreement at $10.000 is associated with this obligation.

It is important for Destin Company to fulfill all three of these performance obligations in order to meet the terms of the contract and satisfy the client's requirements. Failure to do so could result in breach of contract and potential legal repercussions.