Exhibit 17-2 in 2016, Omega Construction Began Work on a Contract with Contract

question 78

Multiple Choice

Exhibit 17-2
In 2016, Omega Construction began work on a contract with a price of $850,000 and estimated costs of $595,000. Data for each year of the contract are as follows:
-Refer to Exhibit 17-2. Assuming the performance obligation is satisfied over time, what would be the balance in Construction in Progress at the end of 2017?

• A) $557,600
• B) $659,600
• C) $680,000
• D) $782,000

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Definitions:

Identical Product

Goods that are exactly the same in terms of quality, size, and features, making them perfect substitutes for each other.

Economic Profit

The gap between the overall income generated and the sum of all expenses, covering both direct and indirect costs.

Total Profit

The financial gain made by a business after subtracting all expenses from its total revenues.

Perfect Competitor

A hypothetical market structure where many firms sell an identical product, entry and exit are free, all information is known to all parties, and no single buyer or seller can influence the market price.