Under the Percentage-Of-Completion Method, a Company Has Recognized $40,000 of Profit

question 141

Multiple Choice

Under the percentage-of-completion method, a company has recognized $40,000 of profit through to the beginning of the current year on a contract, and total estimated contract cost is $500,000 at that time. The contract price is $800,000. What is the percent of completion at the beginning of the current year?

• A) 13.33%
• B) 15.8%
• C) 8%
• D) Insufficient data

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Definitions:

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Graphical representations of the distribution of numerical data using bars of different heights to illustrate the frequencies of different values.

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The use of borrowed funds to increase the potential return of an investment or project.

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Residuals in a statistical model that have been standardized by dividing by an estimate of their standard deviation.

Least-Squares Regression

A statistical method used to determine a line of best fit by minimizing the sum of the squares of the vertical distances of the points from the line.