Method B, Contract/Account Category/Nonsegmented
Method B (Gross Margin %) is another method you can use to calculate the percentage of completion. When method B is used, the percentage of completion is calculated as:
| Gross margin | = | Contract amount | - | Total budgeted costs |
| Gross margin % | = | Gross margin | / | Contract amount |
| Revenue | = | (1 / (1-Gross margin %)) | * | Costs to date |
Because the calculation level is nonsegmented, the percentage of completion is determined at the contract level. That percentage is then used to calculate revenue for each activity that you flagged Yes (Y) in the Inc Activity field on Contract Detail (BR10.2).
Example 8 - Method B, Contract/Account Category/Nonsegmented
Although the percent complete is calculated at a higher level in the contract structure, revenue is calculated for each posting activity account category based on the costs to date for the posting activity multiplied by the summary activity percent complete.