Multi-Storey Builders Ltd Had a Large Three-Year Project with Total

Multiple Choice

Multi-Storey Builders Ltd had a large three-year project with total revenue of $8 000 000 and estimated total costs of $6 500 000. The project was 20 per cent complete at the end of the first year, 70 per cent complete at the end of the second year and 100 per cent complete at the end of the third year. Revenues and costs were as estimated. How much profit was earned during the second year if the percentage of completion method was used?

A) $300 000
B) $750 000
C) $1 050 000
D) None of the above