Computing Revenue and Gross Profit on Long-term Construction Contract uses. As negotiated in the contract, any costs incurred by Supplier Corp. plus a specified profit margin will be paid to Supplier Corp. in the event of a contract cancellation. Actual costs incurred during the first year of the contract were $768,000 including unexpected cost overruns of $96,000 due to labor inefficiencies. incurred to date are $1,350,000, excluding year one inefficiencies. a. Calculate (1) recognized revenue, (2) the gross profit, and (3) adjusted contract margin to be recorded in the second year of the contract