Gleason Construction Enters into a Long-Term Fixed Price Contract to Build

question 17

Multiple Choice

Gleason Construction enters into a long-term fixed price contract to build an office building for $20,000,000.In the first year of the contract Camey incurs $6,000,000 of cost and the engineers determined that the remaining costs to complete are $15,000,000.How much gross profit or loss should Gleason recognize in Year 1 assuming the use of the completed-contract method?

• A)$1,000,000 loss
• B)$1,000,000 profit
• C)$0
• D)$350,000 loss

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Definitions:

Television Viewing

The act of watching content on a television set or through television channels.

Squares Total

The sum of squared differences between each observation and the overall mean of the data set. It is a measure of total variation within a data set.

Sum

The total obtained by adding together a set of numbers or quantities.

ANOVA

Refers to Analysis of Variance, a statistical technique used to compare the means of three or more samples to find if at least one of them differs significantly.