On May 1,2014,Lavender Construction Company entered into a fixed-price contract to construct an apartment building for $3,000,000.Lavender appropriately accounts for this contract under the percentage-of-completion method.Information relating to the contract is as follows:

What is the amount of contract costs incurred during the year ended December 31,2015?
A)$600,000
B)$960,000
C)$990,000
D)$1,440,000

Question

On May 1,2014,Lavender Construction Company entered into a fixed-price contract to construct an apartment building for $3,000,000.Lavender appropriately accounts for this contract under the percentage-of-completion method.Information relating to the contract is as follows:

What is the amount of contract costs incurred during the year ended December 31,2015?

What is the amount of contract costs incurred during the year ended December 31,2015?
A)$600,000 
B)$960,000 
C)$990,000 
D)$1,440,000

Quizplus · Accepted Answer

According to the information provided in the table, the total contract costs incurred till December 31, 2015, is $990,000. This includes the direct materials cost of $300,000, direct labor cost of $420,000, and other costs of $270,000.

On May 1,2014,Lavender Construction Company Entered into a Fixed-Price Contract