Estimated total cost is $250,000, cost to date is $100,000, and contract price is $400,000. What revenue is earned by cost percentage?
Correct Answer
C) $160,000.
Percent complete is $100,000 / $250,000 = 40 percent. Earned revenue is 40 percent of $400,000 = $160,000.
Why This Is the Correct Answer
Percent complete is $100,000 / $250,000 = 40 percent. Earned revenue is 40 percent of $400,000 = $160,000.
Why the Other Options Are Wrong
Option A: $100,000.
$100,000. is below the supported result for earned revenue; it likely uses the wrong base, period, or account bucket.
Option B: $250,000.
$250,000. is above the supported result for earned revenue; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $400,000.
$400,000. is above the supported result for earned revenue; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Preparing Wip money test: bucket before math for earned revenue.
Reference Hint
Study anchor (closed-book): memorize Earned revenue from CSLB Law and Business Study Guide; California tax and payroll guidance / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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