1) Describe the level of detail that Maris went through to obtain information regarding the effect of the accident. If you were an analyst covering Biovail, would you spend time on this calculation?
2) How many truckloads are required to carry $10M of the product? Show your calculation.
3) How should the company recognize revenue for the two possible FOB contract structures mentioned in the case? Why?
Professor Note: I’m not asking you to conjecture about what structure Biovail was using for the particular contract in the case. Given each structure, how would the revenue be recognized?
4) How does the accident affect the stated revenues under the different FOB contract structures? Explain your reasoning.