Model: Estimated Profit
A fabrication company undertakes long-term contracts which involve the fabrication of pre-stressed concrete blocks and the erection of the same on the construction site:
The following information is supplied regarding the contract which is incomplete on 31 March 2010:
|
Cost incurred: |
|
|
Fabrication costs to date: |
8,40,000 |
|
Direct materials |
2,70,000 |
|
Direct labour |
2,25,000 |
|
Overheads |
13,35,000 |
|
Escalation costs to date |
45,000 |
|
Total |
13,80,000 |
|
Contract price |
24,57,000 |
|
Cash received on account |
18,00,000 |
|
Technical estimate of work complete to date: |
|
|
Fabrication: |
|
|
Direct materials: 80% |
|
|
Direct labour & overheads = 75% |
|
|
Erection = 25% |
You are required to prepare a statement of
- The estimated profit on completion of contract
- The estimated profit to date on the contract