Account For Contract Modifications Practice Test

A company has a contract to deliver 100 units at $10 each ($1,000 total). After delivering 40 units, the customer requests 20 additional units at $9 each. The $9 price does not reflect the standalone selling price of $10. The remaining goods are not distinct from those already delivered. How should this modification be accounted for?

Company A has a long-term construction contract originally priced at $500,000. After completing 30% of the work, the parties agree to add scope that increases the contract price by $80,000, which reflects the standalone value of the additional work. The additional work is distinct. How should the modification be treated?