On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $260 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):

Required:
1. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion.
2. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time.
3. Suppose the estimated costs to complete at the end of 2019 are $110 million instead of $60 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method.

Required 1

Required 2

Required 3

Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. (Enter your answers in millions. Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.)

Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. (Enter your answers in millions. Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.)

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Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time. (Enter your answers in millions. Loss amounts should be indicated with a minus sign.)

Suppose the estimated costs to complete at the end of 2019 are $110 million instead of $60 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method. (Enter your answers in millions. Use percentages as calculated and rounded in the table below to arrive at your final answer.)

Playland at Pacific National Exhibition is an amusement park offering 31 different rides (including 4 rollercoasters and 1 water ride). The guests who are 48” or taller can go on any ride they want and so they get more value from visiting the park; let us say their individual demand is given by P = 5 – 0.25qO, where P is the price per ride ($ per ride) and qO is the number of the rides (per day) (the subscript O stands for “One Day;” that’s how the park calls its passes for the guests who are 48” or taller). The guests who are under 48” are not allowed on certain rides so they get less value from visiting the park; let us say their individual demand is given by P = 4 – 0.25qJ, where P is the price per ride ($ per ride) and qJ is the number of the rides (per day) (the subscript J stands for “Jr. One Day;” that’s how the park calls its passes for the guests under 48”). Assume it costs the park flat ¢25 per guest to operate a single ride, and it costs the park flat ¢75 to issue a single ticket to a ride. Assume there are 500 guests 48” or taller and 500 guests under 48” on an average day. We can consider Playland a monopolist in Vancouver

If Playland employed a two-part tariff scheme (the park may choose to ticket each ride, or they may choose to let people go on as many rides [at zero price per ride] as they want and only charge the gate fee for the access to the rides),

6. what would be the gate entry fee for guests 48” or taller ($ per guest)?

7. what would be the gate entry fee for guests under 48” ($ per guest)?

8. what would be the price per ride ($ per ride)?

9. what is Playland’s profit on an average day ($ per day)? Assume zero fixed cost.

A theater is presenting a program on drinking and driving for students and their parents or other responsible adults. The proceeds will be donated to a local alcohol information center. Admission is

$ 2.00$2.00

for adults and

$ 1.00$1.00

for students.​ However, this situation has two​ constraints: The theater can hold no more than

150150

people and for every two​ adults, there must be at least one student. How many adults and students should attend to raise the maximum amount of​ money?

Problem 2: The average Saturday attendance at a movie theater is 974 people with a standard deviation of 54 people. A random sample of 39 Saturdays is selected

Part A: What is the probability that a sample mean will be either less than 954 people or greater than 970 people?

Part B: There is a 97% chance that a sample mean will be above what attendance level?

Part C: What is the probability that more than 1000 people will attend the theater this Saturday?

Use the following data to select one best answer to the following question:

What is the gross profit for the low-rise office building project by applying the Percentage of Completion method for recognizing revenue?

A construction company began operations on January 2, 2010. During the year the company was awarded one construction contract of low-rise office building. The company incurred $100,000 operating expenses for the year for which $75,000 has been paid while the balance is owed as of December 31, 2010. Project data is summarized for the project in the following paragraphs.

The initial contract for the low-rise office building was signed on January 5, 2010 in the amount of $1,000,000. This amount included $800,000 for construction costs, $150,000 for overhead mark-up, and $50,000 for profit markup. The contractor broke ground on February 4, 2010. During the course of construction the client decided to upgrade the quality of the lighting and plumbing fixtures, resulting in a change order issued to the contractor in the amount of $100,000 on October 7, 2010. The change order price was calculated by the contractor as follows: $50,000 construction costs, $37,500 overhead markup, $12,500 profit markup.

At the end of 2010, construction was not complete. However, the client was renting out office space to other entities as well as using some of the offices for the client’s own business entity. Work remaining as of December 31, 2010 included surfacing the parking lot, erecting a portable parking attendant’s station, miscellaneous site concrete work and landscaping. This work was schedule to be completed by May 1, 2010, weather permitting.

A summary of accounting data as of December 31, 2010 included total construction costs in the amount of $800,000 for which $600,000 was paid. The balance reflected unpaid bills for the month of December, and retention withheld on subcontracts throughout the course of the project. The total progress billing as of December 31, 2010 was $1,000,000 of which $900,000 was collected with the balance outstanding as retention receivable. The project manager estimated that given the work left to be completed, approximately $200,000 of construction cost would be incurred.

Question 7 options:

• Given the information below, answer the question.

Sunshine Hotel needs new laundry equipment. There are two alternatives, either buy or lease the equipment. The hotel owner is asking your recommendation to pay less for the equipment.

Prepare a five-year cost schedule for each alternative (Include only relevant costs).  

What is the cost if the owner buys or leases the equipment?

A. Buy: $ 28,500; Lease: $15,000

B. Buy: $ 27,000; Lease: $30,000

C. Buy: $ 27,500; Lease: $30,000

D. Buy: $ 25,100; Lease: $18,000

Pacific Hotels operates a centralized call center for the reservation needs of its hotels. Costs associated with use of the center are charged to the hotel group (luxury, resort, standard, and budget) based on the length of time of calls made (time usage). Idle time of the reservation agents, time spent on calls in which no reservation is made, and the fixed cost of the equipment are allocated based on the number of reservations made in each group. Due to recent increased competition in the hotel industry, the company has decided that it is necessary to better allocate its costs in order to price its services competitively and profitably. During the most recent period for which data are available, the use of the call center for each hotel group was as follows:

During this period, the cost of the call center amounted to $880,000 for personnel and $630,000 for equipment and other costs.

Required:

a. Determine the allocation to each of the divisions using the following:

1. A single rate based on time used. (Do not round intermediate calculations.)

2. Dual rates based on time used (for personnel costs) and number of reservations (for equipment and other cost). (Do not round intermediate calculations.)

A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $580,000; March 31, $680,000; June 30, $480,000; October 30, $840,000. To help finance construction, the company arranged a 7% construction loan on January 1 for $860,000. The company’s other borrowings, outstanding for the whole year, consisted of a $4 million loan and a $6 million note with interest rates of 8% and 6%, respectively.

Assuming the company uses the specific interest method, calculate the amount of interest capitalized for the year. (Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34%).)