Cullumber Enterprises Ltd. has entered into a contract beginning in February 2023 to build two warehouses for Ivanhoe Structures Ltd. The contract is a non-cancellable fixed-price contract for $9.5 million. Billings and collections are lower in 2025 by $500,000 each. The following data pertain to the construction period (all figures in thousands). Costs for the year Estimated costs to complete Progress billings for the year (non-refundable) Cash collected for the year 2023 $4,185 5,115 2024 5,115 388 3,860 4,540 2025 200 -0- 1,100 3,300 4,590 1,910

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Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.