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NEW QUESTION: 1
Merry Lucnhco Co., Corporation uses the percentage-of-completion method to recognize revenue. In
2 000, Merry Lucnhco Co., agreed to construct a facility at a total contract price of $28.0 million and a total expected cost of $24.0 million. Actual costs and cash inflow information are presented below (in
$ millions):
How much income did Merry Lucnhco Co., earn from the contract for years 1998, 1999, 2000 respectively?
A. 0.4700 0.9400 0.9900
B. 0.2350 0.4700 0.4950
C. 0.7833 1.5667 1.6500
Answer: C
Explanation:
Cumulative Cost 1998 = (4.7/24.0)*100 19.5833% Cumulative Revenue 1998=
(4.7/24.0)*28.0 = 5.483333 Profit= Current Revenue - Expense = 0.783333
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D. No attribute
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Which of the following is the LEAST effective way to influence the factors that create changes to the cost baseline?
A. Explain to those requesting changes the negative impact of change to the project.
B. Review the project scope with the functional manager responsible for the greatest
number of requested changes.
C. Eliminate the scope causing the most changes.
D. Notify all stakeholders that no more changes will be allowed.
Answer: D
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