Willingham Construction Company uses the percentage-of-completion method. During 2007, the company entered into a fixed-price contract to construct a building for Richman Company for $30,000,000. The following details pertain to the contract:Percentage of completion in 2007:25%;Estimated total cost of contract in 2007: $22,500,000;Gross profit recognized to date (2007): $1,875,000;Percentage of completion in 2008: 60%;Estimated total cost of contract in 2008: $25,000,000;Gross profit recognized to date (2008): $3,000,000.The amount of construction costs incurred during 2008 wasa. $15,000,000.b. $9,375,000.c. $5,625,000d. $2,500,000.
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