Question

Explain the merits of Contract Costing.​

Answer 1

Answer:

Advantages. The contractor controls the costs involved in the contract for labor, material, other fixed expenses, etc. A contract account is prepared for each customer, identifying the cost incurred to date & work completion. Control is also maintained over the defectives arising out of quality deficiency.

Explanation:

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Answer 2

Answer:

Advantages of Contract Account

Work can be completed without any delay. ... A contractor can find the total cost of the contract, cost per each element and the amount of profit available from each contract. 3. There is no possibility of incurring loss since all the costs incurred are recovered from the contractee.