Meaning of Contract Costing

Contract or terminal costing, as it is termed, is one
form of application of the principles of job costing. In fact a bigger job is referred to as a
contract. Contract costing is usually adopted by building contractors engaged in the task
of executing Civil Contracts. Contract costing have the following distinct features :
1. The major part of the work in connection with each contract is ordinarily carried out at the
site of the contract.
2. The bulk of the expenses incurred by the contractor are considered as direct.
3. The indirect expenses, mostly consist of office expenses of the yards, stores and works.