500,000 $(65840) $(199,375) LOSS RECOGNIZED IN YEAR 2 *(CONTRACT P...

2,500,000

$(652,840)

$(199,375)

Loss recognized in Year 2

*(Contract price × 45.45%) - revenue recognized in Year 1 Revenue recognized in Year 2 on project.

† Cumulative revenue recognized up to Year 1 on project (computed in prior discussion).

Page: 112

Dr. Construction expense 2,797,360

2,500,000

Cr. Construction in progress 652,840 199,375

Cr. Revenue from long-term contracts 2,144,520 2,300,625

Section C: Performance Management

Topic 3: Performance Measures

Page: 371

Question 1C1-CQ2216

Page: 372

Question 1C1-CQ18

The financial statements show a $3,000 loss for a job that was budgeted to show a $6,000 profit.

Actual (purchased and used)

Budget

d. The flexible budget variance was $900 unfavorable favorable.

Section D: Cost Management

Topic 5: Business Process Improvement

Page: 504