CONTRACT COSTING PRESENTATION To Teach Concepts of Contract
Costing
To Identify the Costs in a Contract
To Tell the Importance of Contract Costing
To Calculate Profit on Incomplete Contracts
WHAT IS CONTRACT COSTING
Contract costing is that method of costing in cost accounting which is used to collect and identify all the expenses relating to a specific contract. For this purpose, Contractor has to maintain contract ledger in which he has to show contract account.
CONTRACT COSTS
Material Cost Labor Cost Direct Expenses Overheads Sub-Contract Cost Extra Work Cost
WORK CERTIFIED
Value which is receivable on finishing a contract or part of contract after certifying it with authority or architect’s certificate.
It will be credited to Contract Account
WORK UNCERTIFIED
It will also credited to Contract Account. Completed but not certified
MATERIAL AT SITE
It will be the material which is rest after using in construction at the end of year. It is just like closing stock and will be credited in contract account.
NOTIONAL PROFIT
Credit Side of Contract Account – Debit Side of Contract Account
First Year
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