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Contract costing

Unit 5: Costing in Different SituationsTopic 4 of 6
Browse the Cost and Management Accounting syllabus

Cost and Management Accounting

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What the syllabus expects

  • Concept and features
  • Comparison with job costing
  • Incomplete, near-complete and complete contract accounts
  • Certified and uncertified work
  • Contractee and work-in-progress accounts and balance sheet
  • Cost-plus contracts
  • Escalation and de-escalation clauses

Contract costing

Bachelor of Business Studies (BBS) — Second Year

Subject: Cost and Management Accounting (MGT 212)

Unit 5: Costing in Different Situations

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

  • Explain the scope and key elements of contract costing.
  • Prepare the relevant cost records or calculations and interpret their use in managerial planning and control.

Curriculum Scope

  • Concept and features
  • Comparison with job costing
  • Incomplete, near-complete and complete contract accounts
  • Certified and uncertified work
  • Contractee and work-in-progress accounts and balance sheet
  • Cost-plus contracts
  • Escalation and de-escalation clauses

Detailed Microsyllabus

  1. Contract-cost foundations

    1. Contract characteristics and comparison with job costing.
    2. Materials, labor, overhead and other contract costs.
    3. Certified and uncertified work.

  2. Progress and profit

    1. Incomplete, near-complete and completed contracts.
    2. Apply the profit-recognition procedure prescribed for the exercise.
    3. Distinguish curricular contract-account methods from a separately applicable reporting standard.

  3. Accounts and presentation

    1. Contract, contractee and work-in-progress accounts.
    2. Cash received, retention and relevant balances.
    3. Balance-sheet presentation under stated assumptions.

  4. Contract terms

    1. Cost-plus arrangements.
    2. Escalation and de-escalation clauses.
    3. Evaluate how supplied terms affect cost and billing.

Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 31-34.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here.