COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following statements is NOT true about contract costing?
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Number of contracts undertaken at a time is limited
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Work is done at the site of the customer
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Requires long period for completion
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Indirect costs are higher as compared to job costing
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Explanation:
Detailed explanation-1: -Expert-Verified Answer. The statement is Indirect costs are higher as compared to job costing.
Detailed explanation-2: -Contract costing is the tracking of costs associated with a specific contract with a customer. For example, a company bids for a large construction project with a prospective customer, and the two parties agree in a contract for a certain type of reimbursement to the company.
Detailed explanation-3: -Job costing is the ascertaining of costs that are incurred in the undertaking of a specific job. On the other hand, contract costing is the ascertaining of costs associated with the production of a specific product as per the contract agreement with the customer.
There is 1 question to complete.