Estimated total revenue is $1,320,000 and estimated total cost is $1,023,000. What estimated gross profit is built into the job?
Correct Answer
D) $297,000
Estimated gross profit is estimated revenue minus estimated total cost.
Why This Is the Correct Answer
Estimated gross profit is estimated revenue minus estimated total cost.
Why the Other Options Are Wrong
Option A: $247,000
$247,000 is below the supported result for estimated gross profit; it likely uses the wrong base, period, or account bucket.
Option B: $267,000
$267,000 is below the supported result for estimated gross profit; it likely uses the wrong base, period, or account bucket.
Option C: $287,000
$287,000 is below the supported result for estimated gross profit; it likely uses the wrong base, period, or account bucket.
Memory Technique
Gross and profit live in different drawers; Controller Enters tells which opens.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section One, Accounting Methods, Percentage-of-Completion Method; use the job ledger figures in the stem and recompute the same accounting measure.
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