Question

Big MAC Contractors began work on a contract to build a new student union on the St. Maximo University campus for $910,000. Information concerning the project follows:

	Year 1	Year 2	Year 3
Percentage of work completed	25%	35%	40%
Costs incurred during the year	$172,000	$248,000	$180,000
Progress billings during the year	160,000	360,000	380,000
Cash collected during the year	130,000	340,000	430,000

How much revenue should Big MAC recognize during Year 1 if it uses the percentage of completion method?

Group of answer choices

$227,500

$900,000

$ 77,500

$160,000

Answer 1