In accounting for construction contracts using the percentage of completion method, the gross profit recognized during the year would be the estimated gross profit by the percentage of the costs incurred to date the:   Total estimate cost Total cost incurred to date Unbilled portion of the contract price Total contract price

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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.