At the end of the first year, the XYZ Team had incurred $550,000 of cost, with...
At the end of the first year, the XYZ Team had incurred $550,000 of cost, with the total estimated cost of $1,050,000. Their total estimated revenue is $1,200,000. If the percentage of completion by labor hours expended is 60.8%, calculate the cost of revenue to date,
- By cost to cost method, using Alternative B.
- By labor hours expended method, using Alternative B.
Homework Answers
a. Cost to cost method
- Cost Incurred - $550,000
- Total Estimated cost - $1,050,000
- % of cost incurred till date = ($550,000 ÷ $1,050,000) = 52.38%
- Total Estimated revenue - $1,200,000
- Cost of revenue to date = ($1,200,000 * 52.38%) = $6,285,600
b. Labor hours expended method
- labor hours expended - 60.80%
- Total estimated revenue - $1,200,000
- Cost of revenue to date - ($1,200,000 * 60.80%) = $7,296,000
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