Differences Between Job And Contract Costing

Following are the main differences between job and contract costing:

* A job is normally carried out inside a factory. A contract work is done at a site away from the factory.

* Number of jobs at any time may be more. Comparatively, the number of the pieces of contract work may be fewer.

* Direct charging of expenses is difficult in job costing. Therefore, it needs to be absorbed. In contract costing, on the other hand, all expenses incurred at the site are charged directly to the contract.

* Jobs require comparatively shorter terms. Therefore, profit is computed and credited after a job's completion. Contract work requires a larger period. This requires the crediting of the profit of incomplete contracts at the end of each accounting period.

Related Topics
Concept And Meaning Of Job Order Costing
Advantages And Disadvantages Of Job Order Costing
Concept And Meaning Of Contract Costing

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