Classical Ltd

question 35

Multiple Choice

Classical Ltd.Began work in 2017 on a contract for $1,250,000.Other data are: If Classical uses the percentage-of-completion method, the gross profit to be recognized in 2017 is

• A)$450,000.
• B)$210,000.
• C)$200,000.
• D)$100,000.

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Definitions:

Finished Goods Inventory

The stock of completed products that are ready for sale but have not yet been sold.

Factory Payroll

The total amount of salaries and wages paid to employees working in a factory, directly related to manufacturing operations.

Direct Labor

Costs associated with the employees who are directly involved in the production of goods or services.