A company has entered into a very profitable fixed price contract for constructing a building over a period of three years. It incurs the following costs relating to the contract during the first year:

Cost of material-P2.5 Million

Site labor cost-P2.0 Million

Agreed administrative cost per contract to be reimbursed by the customer-P1 Million

Depreciation of the plant used for the construction-P0.5 Million

Marketing costs for selling apartments, when they are ready-P1.0 Million

Depreciation of idle plant and equipment-P0.5 Million

Total estimated cost of the project-P18 Million

The percentage of completion (overtime) of this contract at the year-end is?

A. 25%

B. 33 1/3 %

C. 27%

D. 39%

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