Question

Choose the correct answer: In contract costing the cost unit is (a) job (b) batch (c) unit produced (d) contract.

   Choose the correct answer:
 In contract costing the cost unit is
(a) job
(b) batch
(c) unit produced
(d) contract.

Cost Accounting

Cost Accounting

K. Alex 1st Edition

Chapter 10, Problem 8

Instant Answer

Step 1

Contract costing, also known as terminal costing, is a method used in accounting where the cost unit is typically a single, large, and identifiable project. Examples include construction projects like building a bridge, a ship, or a building. Each contract or Show more…

Show all steps

lock

Thanks for your feedback!

Choose the correct answer: In contract costing the cost unit is (a) job (b) batch (c) unit produced (d) contract.

Play audio

Feedback

Powered by NumerAI

Labs

Want to see this concept in action?

NEW

Explore this concept interactively to see how it behaves as you change inputs.

View Labs

Key Concepts

Contract Costing

Contract costing is a costing method used for large, unique projects where each contract is treated as a separate cost unit. Industries such as construction, shipbuilding, and specialized engineering often use this method because each contract differs significantly in scope, scale, and duration, requiring detailed tracking of costs specific to the contract.

Cost Unit

A cost unit is the basic unit of output for which costs are accumulated and measured. In the context of contract costing, the cost unit is the contract itself, meaning that all costs incurred are attributed to that specific contract, allowing for accurate cost control, pricing decisions, and profitability analysis.

Recommended Videos

Ace is your personal tutor. It breaks down any question with clear steps so you can learn.

Start Using Ace

Continue solving this problem

Create a free account to:

View full step-by-step solution
Ask follow-up questions with Ace AI
Save progress and study later