(Long Term Contracts) Smiley Homes recently purchased a large piece of land and has begun construction of ten new homes, which are anticipated to cost a total of $280,000 each to manufacture. At the end of Year 1, Smiley Homes has incurred the following costs:
|
Land purchase |
$1,200,000 |
|
Materials |
500,000 |
|
Salaries and wages |
750,000 |
|
Overhead |
250,000 |
The homes will be sold for $450,000 each. At the end of Year 1, $1,300,000 of certified work was completed. What profit will be reported in Year 1 for the project?