Question

In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2026. The information related to the contract is as follows:

Year Cost Incurred Estimated Costs to Complete Billings Cash Collections
2024 $2,400,000 $5,600,000 $2,000,000 $1,800,000
2025 $3,600,000 $2,000,000 $4,000,000 $3,600,000
2026 $2,200,000 $0 $4,000,000 $4,600,000

Based on the given information, what is the total cost incurred by the Westgate Construction Company for the road construction project?
1) $8,200,000
2) $9,200,000
3) $10,200,000
4) $11,200,000

Answer 1

The total cost incurred by Westgate Construction Company for the road construction project is $8,200,000, which is obtained by adding the annual costs from 2024 to 2026.

Step-by-step explanation:

The total cost incurred by the Westgate Construction Company for the road construction project is calculated by summing the costs incurred over the years 2024, 2025, and 2026.

• 2024: $2,400,000
• 2025: $3,600,000
• 2026: $2,200,000

Thus, the total cost incurred is $2,400,000 + $3,600,000 + $2,200,000 = $8,200,000. This is answer option 1).