Given the Following Data, What Is the Balance in Construction-In-Process

question 66

Multiple Choice

Given the following data, what is the balance in construction-in-process at the end of 2006 under the percentage of completion method for a project begun in 2006 with a contract price of $1,100? $\begin{array}{|l|l|l|}\hline & 2006 & 2007 \\\hline \text { Costs incurred this year } & \$ 100 & \$ 200 \\\hline \text { Total estimated costs remaining at end of year } & 700 & 400 \\\hline\end{array}$

• A) $100
• B) $38
• C) $138
• D) $400

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Definitions:

Labor

The application of human physical and intellectual labor in the creation of goods and services.

Capital Equipment

Long-term assets acquired or used by a business for the production of goods and services, such as machinery, buildings, and vehicles.

Market Price

The current price at which an asset or service can be bought or sold in a given market, determined by supply and demand.

Equilibrium Quantity

The amount of a good or service that is supplied and demanded at the equilibrium market price.