Brisebois Engineering Ltd Actual Results Required:
A) Calculate the Revenue, Expense, and Profit for Each

question 17

Essay

Brisebois Engineering Ltd.signed a contract to build a bridge and traffic interchange for three
small municipalities.Construction will occur over a four-year period.The following data pertain to the contract and subsequent construction: $\begin{array}{lll}\text { Contract price: } & \$ 1,750,000 \\\text { Estimated costs: } & 1,250,000 \text { (remained unchanged throughout contract period) }\end{array}$ Actual Results: $\begin{array}{lll}\text { Year } & \text { Costs } & \text { Receipts }\\1 & \$ 650,000 & \$ 205,000 \\2 & \$ 325,000 & \$ 137,000 \\3 & \$ 200,000 & \$ 600,000 \\4 & \$ 75,000 & \$ 408,000\end{array}$ Required:
A) Calculate the revenue, expense, and profit for each of the four years using the:
i.Cost recovery method
ii.Percentage of completion
B) Calculate the gross profit margin for each year under each alternative

• A) Calculate the revenue, expense, and profit for each of the four years using the:
• i.Cost recovery method
• ii.Percentage of completion
• B) Calculate the gross profit margin for each year under each alternative

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Definitions:

Total Revenue

The total amount of money generated from the sale of goods or services.

Decrease

A reduction in quantity, size, intensity, or the number of something.

Equilibrium Price

The price at which the quantity of goods supplied equals the quantity of goods demanded, leading to market balance.

Perfectly Elastic

A situation where a small price change results in an infinite change in the quantity demanded or supplied.