Road Runner Ltd builds highways and toll roads. Road Runner has an excellent track record in estimating costs of projects and is a very efficient construction company. On 1 July 20X0 Road Runner entered into a two-year contract with Toll Ltd to build a 60 km toll road for $150 million. The new toll road will be built alongside an existing highway and Toll plans on opening the toll road in 20 km sections as it is completed. Road Runner estimates this project will require $100 million of road construction material and 800,000 construction hours at an average cost of $30 per hour.

At 30 June 20X1, 20 kms of toll road have been handed over to Toll by Road Runner and are in use by Toll. Road material costs of $30 million and 100,000 construction hours have been incurred, of which $2 million for materials is for the next section of the tollroad that Road Runner is about to commence working on for Toll.

Based on the facts given, revenue recognized by Road Runner for the year ended 30 June 20X1 using an output method and an input method to measure stage of completion are (rounded to nearest $100,000):

Select one:

a.

Output method	Input method
$75,000,000	zero

b.

Output method	Input method
Cannot determine	$39,900,000

c.

Output method	Input method
zero	$37,500,000

d.

Output method	Input method
$50,000,000	$37,500,000

e.

Output method	Input method
$37,500,000	$50,000,000