Cabinor, Inc., is an incinerator construction company. It operates by constructing incinerators for corporations or by providing incinerator management services to local governments. On January 1, Year 5, Cabinor entered into a 3-year contract to construct an incinerator for a corporation for a contract price of $5,000,000. On the same day, it also entered into a 5-year contract with a local government to provide management services for a contract price of $3,000,000. The construction and management services are single performance obligations to be satisfied over time. For the construction contract, management determines that the progress toward completion can be reasonably measured using the cost-to-cost method. The following information applies to the contract: Costs incurred during the year Costs expected in the future Year 5 $1,500,000 $2,500,000 Year 6 $2,000,000 $2,000,000 Year 7 $1,000,000 For the management contract, the local government expects that the capacity of its four incinerators will increase by 20% from the current level of 300 tons of solid waste per day. To manage the incinerators, Cabinor incurs $2,000 per ton cost for solid waste handled for the year based on the beginning capacity. The progress toward completion is estimated using the ratio of the increase in capacity to date relative to the expected increase in capacity. The total capacity levels of the incinerators managed by Cabinor are listed below: Year 5 End Year 6 End Year 7 End Year 8 End Year 9 End Total capacity (tons per day) 330 345 352 357 360