Lockheed Martin Corporation manufactures defense equipment using job costing. In December 2035, the company incurs $120,000,000 in direct costs and $60,000,000 in factory overhead for a missile system. The project is expected to be completed in 4 years.

Required:

• Calculate the annual cost of the project using the completed contract method.
• Determine the total cost incurred each year.
• Allocate overhead costs using the percentage of completion method.
• Prepare a cost reconciliation statement showing the cost incurred and revenue recognized.
• Analyze the profitability of the project at completion.