When accounting for revenue over time for a long-term contract, the percentage of completion used to recognize revenue in the first year usually is determined by measuring:      A. Cost incurred in the 1st year, divided by estimated remaining cost to complete the project.   B. Cost incurred in the 1st year, divided by estimated total cost for the completed project.   C. Cost incurred in the 1st year, divided by estimated gross profit.   D. Cost incurred in the 1st year, divided by estimated total cost to be incurred in the remaining years of the project.

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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.