Newmarket

Sir this is an MCQ in BPP text where the total revenue is 27 million and the cost related to the performance obligation which would be satisfied in future for 2 years is 800,000; profit markup on cost is 30%.

We will calculate the revenue attributable to this obligation = 800,000*2*130%= 2,080,000 and deduct this amount from the revenue for the year.

Will we deduct 1,600,000 from the total cost of sales figure as well?

Thanks