Contract costing is known as terminal costing. Contract costing has many similarities to job costing and is usually applied to work which is:
(a) Undertaken on customer’s special requirements;
(b) Relatively long duration;
(c) Site based; and
(d) Frequently of a construction nature.
Contract costing is generally applied to business engaged in building or other construction work. The basic principles of contract costing are similar to those that are applied in job costing system.
