Sunshine Contractors started a contract in January 2011 to build a bridge at a fixed price of $14 million. The bridge was to be completed by October 2013. Total cumulative costs incurred by the end of December 2011 and 2012 were $2 million and $6 million, respectively. Sunshine is unable to estimate the total costs of the project prior to completion. Final costs at the end of the project totaled $11 million. How much cost of sales will Sunshine report in 2013?
A)$3,000,000
B)$5,000,000
C)$8,000,000
D)$11,000,000

Question

Quizplus · Accepted Answer

Since the total costs at the end of the project were $11 million and $6 million had already been incurred by the end of 2012, the cost of sales for 2013 would be the remaining costs, which is $11 million - $6 million = $5 million.

Sunshine Contractors Started a Contract in January 2011 to Build