Tuesday, May 5, 2009

Contract Costing Business Need

There are various methods of computing costs that are available to an accountant to suit the business needs of a company. However, the basic principles are the same in every method of job order costing. Primarily, the choice of a particular method of costing depends on the nature of business and personal preferences of the accountant.

Contract costing is the form of specific order costing.

Accountants will use contract often most often where the work is undertaken to customer’s special requirements. Further, it is generally used when each order is of long duration, such as building construction, ship building, structural for bridge, constructions projects, etc.

It is not use often in the manufacturing or retail settings.

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