Which of the following costs shall from part of contract costs of long-term construction contract?       a. General administration costs for which reimbursement is not specified in the contract b. Research and development costs for which reimbursement is not specified in the contract c. Construction overheads including costs such as the preparation and processing of construction personnel payroll. d. Selling costs such as broker’s commission

Q: Who should be responsible for coordination of work done in each of the following cases and provide…

A: The contact has been given by the owner to the contractor in order to get any work done.

Q: Allocate a contract’s transaction price to multiple performance obligations.

A:

Q: In any construction project, the total bill to the owner must equal a. Gross profit b. Net profit c.…

A: The construction contract accounting is the accounting system suitable for businesses engaged in…

Q: Which of the following factor is irrelevant regarding a special order

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A: Introduction:- All costs are not related to production of a product is treated as period costs.

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A: Overhead means the all indirect expenses which were incurred in the manufacturing the product or…

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Q: Cost to construct a plant includes the contract price, architect's fees, building fees, excavation…

A: The interest cost that is occured to finace the long term project is capitalized until the project…

Q: fixed costs (F), variable costs (V), or mixed costs(M).

A: Fixed cost - Fixed cost remains constant irrespective of the level of activity. It is an unavoidable…

Q: diffentiate between contract costing and service costing

A: Contract costing is the costing method adopted to do the cost accounting for a specific contract…

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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.