Russell Ltd Commenced the Construction of a Bridge on 1July

question 27

Multiple Choice

Russell Ltd commenced the construction of a bridge on 1July 2003. It has a fixed-price contract for total revenues of $35million. The expected completion date is 30 June 2006. The expected total cost to Russell Ltd at the beginning of the project is $29 million. The following information relates only to the construction of the bridge:

Russell Ltd uses the percentage of completion method based on cost to account for its construction contracts. What is the gross profit to be recognised in each of the 3 years (rounded to the nearest $000) ?

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Definitions:

Segmentation Base(s)

Criteria used to classify and divide a market into distinct groups, based on characteristics like demographics, psychographics, or behavior.

Segmentation Variable(s)

Criteria or characteristics used to divide a market into distinct groups of buyers based on needs, behaviors, or demographics.

Outback Steakhouse

An Australian-themed American casual dining restaurant chain, serving American cuisine, based in Tampa, Florida with locations internationally.

Product Differentiation

The method of making a product or service stand out in the market to appeal more to a specific target audience.