Smart Software, Inc. develops and sells accounting software. The Company sells software licenses together with software upgrades, customer support and user training. Software upgrades are available on an annual basis. The customer support is provided for two years after the license sale and the user training is provided for 1 year after the license sale. The Company typically sells these together in a bundled arrangement. The Company estimates the stand-alone selling price ("SSP") for each of these would be as follows:

Software license $70,000

Software upgrades for one year $10,000

Customer support for one year $15,000

User training for two years $5,000

a. If Smart Software, Inc. sells a bundle for $75,000 on December 31, 2022, how should the bundle price be allocated to each performance obligation?

Select one:

A. The bundle price should be allocated $45,000 to the license, $10,00 to the software upgrades, $15,00 to the customer support, $5,000 to the training.

B. The bundle price should be allocated $52,500 to the license, $7,500 to the software upgrades, $11,250 to the customer support and $3,750 to the training.

C. The bundle price should be allocated $52,500 to the license, $11,250 to the software upgrades, $7,500 to the customer support and $3,750 to the training.

D. The $75,000 should be considered the price of the all the products and services and recognized immediately upon sale.

E. The bundle price should be allocated $52,500 to the license and equally to the other performance obligations.

F. The bundle price should be allocated $70,000 to license and equally to the other three performance obligations.