what is CONTRACT COSTING cs executive cost and management mcq notes
Contract costing is “A form of specific order costing;attribution of costs to individual contracts”. A contract cost is “Aggregated costs of a single contract;usually applies to major long term contracts rather than short term jobs”.
Features of longterm contracts:
By contract costing situations, we tend to mean long term and large contracts: such as civil engineering contracts for building houses, roads, bridges and so on. We could also include contracts for building ships, and for providing goods and services under a long term contractual agreement.
- With contract costing, every contract and each development will be accounted for separately; and does, in many respects, contain the features of a job costing situation.
- Work is frequently site based.