A contract amount is $210,000 and estimated cost at completion is $168,000. What gross profit is forecast?
Correct Answer
D) $42,000.
Forecast gross profit is contract amount minus estimated cost at completion: $210,000 - $168,000 = $42,000.
Why This Is the Correct Answer
Forecast gross profit is contract amount minus estimated cost at completion: $210,000 - $168,000 = $42,000.
Why the Other Options Are Wrong
Option A: $28,000.
$28,000. is below the supported result for gross profit forecast; it likely uses the wrong base, period, or account bucket.
Option B: $32,000.
$32,000. is below the supported result for gross profit forecast; it likely uses the wrong base, period, or account bucket.
Option C: $38,000.
$38,000. is below the supported result for gross profit forecast; it likely uses the wrong base, period, or account bucket.
Memory Technique
Gross Profit Forecast drawer for Forecasting Final: label contract before counting dollars.
Reference Hint
Study anchor (closed-book): memorize Gross profit forecast from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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