When Using the Percentage-Of-Completion Method of Accounting for Long-Term Contracts

When using the percentage-of-completion method of accounting for long-term contracts, the percentage of completion used to recognize gross profit in the first year usually is determined by measuring:

A) Costs incurred in the first year, divided by estimated remaining costs to complete the project.
B) Costs incurred in first year, divided by estimated total costs of the completed project.
C) Costs incurred in first year, divided by estimated gross profit.
D) None of these is correct.