Example of Stage of completion by physical completion

Example of Stage of completion by physical completion

One method to determine the stage of completion is physical completion. Under this method stage of completion is calculated work completed at the end of year as proportion to total work to be completed. The following examples will explain this concept in depth.

Example # 1

ABC Company is constructing a road of 500 km, the construction details are given as under

Road Length	500 Km
Cost incurred to date	200 Million
Road constructed at year end	200 Km
Period of contract	2 Years
Contract Price	$ 60 million
Calculate Stage of Completion by physical completion

Solution

Road Length	500 Km
Completed Road	200 Km
Stage of completion (200 Km / 500 Km) x 100	40%

Example # 2

XYZ & Company is building housing schemes of 100 houses for residential purposes. The contract detail are given below

Contract Price for construction of 100 Houses	200 Million
Cost incurred at the year end	50 Million
House constructed at year end	25 Houses
Contract completion period	4 Years
Calculate stage of completion by physical method	?

Solution

Total House to be Constructed	100
Houses constructed to data	25
Stage of completion ( 25 Houses/ 100 Houses)	25%