12/31/1712/21/18Cost incurred to dateEstimated cost to complete?4,900,00014,200,0009,000,000Percentage of Completion?60%Income recognized to date700,0002,400,000What is the cost incurred to date in 2017?What is the Percentage of completion in 2017?

Under percentage of completion method the revenue is recognised over the life of the construction…

12/31/17 12/21/18 Cost incurred to date ? 4,900,000 Estimated cost to complete 14,200,000 9,000,000 Percentage of Completion Income recognized to date ? 60% 700,000 2,400,000 What is the cost incurred to date in 2017? What is the Percentage of completion in 2017?

12/31/17 12/21/18 Cost incurred to date ? 4,900,000 Estimated cost to complete 14,200,000 9,000,000 Percentage of Completion Income recognized to date ? 60% 700,000 2,400,000 What is the cost incurred to date in 2017? What is the Percentage of completion in 2017?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 8DQ: Describe the cost formula for a strictly fixed cost such as depreciation of 15,000 per year.

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

12/31/17
12/21/18
Cost incurred to date
Estimated cost to complete
?
4,900,000
14,200,000
9,000,000
Percentage of Completion
?
60%
Income recognized to date
700,000
2,400,000
What is the cost incurred to date in 2017?
What is the Percentage of completion in 2017?

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Percentage of completion method defintiion

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Step 2-Calculation of Total contract Revenue

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Step-3- Calculation of Percentage completed in 2017

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Step 4-Cost incurred to date

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