FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Plucky Company recently entered into a contract in which Plucky charges a price of actual cost plus 20%. If the price charged based on this formula is less than the target price of $4,500,000, Plucky is entitled to also receive 50% of the difference between the actual cost and the cost that would lead to the formula price equalling the target price. Plucky incurred an actual cost of $3,600,000. How much will Plucky make from the contract?

a) $4,320,000

b) $4,395,000

c) $4,410,000

d) $4,500,000

 

Pleae help me sir.. it's too difficult

 

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