ABC Co. started work on an P8,000,000 fixed-price construction contract in 20x1. Information on the contract is as follows: 20x1 20x2 Costs incurred per year 2,850,000 3,670,000 Estimated costs to complete 4,275,000 1,630,000 How much profit (loss) is recognized in 20x2?
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- Break-even sales under present and proposed conditions Kearney Company, operating at full capacity, sold 400,000 units at a price of $246.60 per unit during 20Y5. Its income statement for 20Y5 is as follows: The division of costs between fixed and variable is as follows: Management is considering a plant expansion program that will permit an increase of $8,631,000 (35.000 units at $246.60) in yearly sales. The expansion will increase fixed costs by $3,600,000 but will not affect the relationship between sales and variable costs. Instructions Determine for 20Y5 the total fixed costs and the total variable costs.Break-even sales under present and proposed conditions Kearney Company, operating at full capacity, sold 400,000 units at a price of $246.60 per unit during 20Y5. Its income statement for 20Y5 is as follows: The division of costs between fixed and variable is as follows: Management is considering a plant expansion program that will permit an increase of $8,631,000 (35.000 units at $246.60) in yearly sales. The expansion will increase fixed costs by $3,600,000 but will not affect the relationship between sales and variable costs. Instructions Determine the maximum operating income possible with the expanded plant.Philip Construction Company started a project with a contract price of P80 million. The cost incurred to date is P12 million and the estimated cost to complete is still P48 million. Under the cost cost basis, how much is the income from construction? a) P 20 Million b) P 8 Million c) P 32 Million d) P 4 Million
- n a fixed price incentive fee contract, the target cost is $600,000 and the target profit is 10%. The price ceiling is $680,000. The share ratio percentage for the vendor is 60%. If the actual cost is $630,000, what is the final value of this procurement? $630,000 $330,000 $672,000 $78,000The directors of Pelta Co are considering a planned investment project costing $25m, payableat the start of the first year of operation. The following information relates to the investmentproject:Year 1 Year 2 Year 3 Year 4Sales volume (units/year) 520,000 624,000 717,000 788,000Selling price ($/unit) 30·00 30·00 30·00 30·00Variable costs ($/unit) 10·00 10·20 10·61 10·93Fixed costs ($/year) 700,000 735,000 779,000 841,000This information needs adjusting to take account of selling price inflation of 4% per year andvariable cost inflation of 3% per year. The fixed costs, which are incremental and related to theinvestment project, are in nominal terms. The year 4 sales volume is expected to continue forthe foreseeable future.Pelta Co pays corporation tax of 30% one year in arrears. The company can claim tax-allowabledepreciation on a 25% reducing balance basis.The views of the directors of Pelta Co are that all investment projects must be evaluated overfour years of operations, with an…Dunne Co. sells equipment service contracts that cover a twoyear period. The sales price of each contract is $600. Dunne's past experience is that, of the total dollars spent for repairs on service contracts, 40% is incurred evenly during the first contract year and 60% evenly during the second contract year. Dunne sold 1,000 contracts evenly throughout the 2020. 1. What is the contract revenue for 2020? a. 120,000 b. 240,000 c. 300,000 d. 150,0002. What amount should be reported as deferred service revenue on December 31,2020? a. 540,000 b. 480,000 c. 360,000 d. 300,0003. What is the contract revenue for 2021? a. 180,000 b. 360,000 c. 300,000 d. 120,0004. What is the contract revenue for 2022? a. 240,000 b. 360,000 c. 180,000 d. 0
- For the year just ended, Lotlot Company had direct costs of P1 Million based on a production set up for the period. If the alternative set up were adopted, direct costs could have been P850,000. In addition, Lotlot fixed costs were P100,000. The incremental costs was P250,000 P150,000 P100,000 P50,000In a fixed price incentive fee contract, the target cost is $100,000 and the target profit is 10%. A price ceiling has been set at $110,000. The share ratio percentage for the vendor is 30%. If the actual cost is $80,000, what is the overhead fee for this procurement? $10,000 $16,000 $6,000 $96,000The following data relate to a construction job started by Worthington Co. during 2009: Total contract price................................................................ P300,000Actual costs incurred during 2002......................................... 60,000Estimated remaining costs.................................................... 120,000Billed to customer during 2002.............................................. 90,000Received from customer during 2003................................... 30,000 Under the completed-contract method, how much should Worthington recognize as gross profit for 2009?a. 0b. 40,000c. 80,000d. 100,000
- The Market Company won a contract to build a shopping center at a price of $300 million. The following schedule details the estimated and actual costs of construction each year as well as the total estimated cost. What amount of revenue will be recognized in Yr. 1 using the percentage completion method? Yr 1 $40,000,000 Yr. 2 $60,000,000 Yr. 3 $70,000,000 Yr. 4 $30,000,000 Total $200,000,000 Select one: a. $60,000,000 b. $50,000,000 c. $0 d. $40,000,000 e. $300,000,000Dakota Hi-C Steel signed a contract that will generate revenue of $210,000 now, $226,800 in year 1, and amounts increasing by 8% per year through year 5. Calculate the future worth of the contract at an interest rate of 8% per year. Also, develop the FV function that will correctly determine F for revenues placed in cells B2 through B7.ADIB has signed a Musharaka contract with ADIA ADIA provided 27 9% capital contribution in the project and agreed to the same profit-sharing percentage (279%). In addition, ADIB appointed ADIA as a professional manager on a fee-based arrangement to manage the project. Suppose that at the end of the first year project generates a loss of AED 18,786. What will be the loss share of ADIA?