Page 238 - DCOM202_COST_ACCOUNTING_I

Cost Accounting – I

Notes 6. Write short notes on the following:
(a) Cost-plus contract, (b) Escalation clause,

(c) Sub-contract cost, and (d) Work-in-progress.
7. What is the treatment of sub-contract cost in contract account?
8. Write short notes on the treatment of following in contract costing:
(a) Certified work, (b) Uncertified work,
(c) Issue of plant to contract, (d) Materials in hand, and

(e) Contract ledger.
9. What is work-in-progress and how it is included in the contract account? Describe how this
account will be shown in the balance sheet.
10. Discuss the important points for contract costing.

11. How will you treat profit on incomplete contracts in cost account?
12. Discuss contract ledger and prepare a specimen of the contract account.
13. Explain the different methods of computing profits in contract accounts.
14. Write short notes on the following:

(a) Loss of completed and incomplete contract,
(b) Notional profit, and
(c) Profit on incomplete contract.
15. Indicate how would you deal with the following items:
(a) Plant and machinery purchased and used on contract work,

(b) Amounts received from contractee, and
(c) Materials lying unused at site.
16. Rajendra took a contract on 1 April, 2007. The contract price was ` 7,50,000. The expenses
st
were made upto its completion i.e. 30th September, 2008 as follows:
` `
Material purchased 50,000 Establishment charges 6,000
Material issued from stores 1,50,000 Plant issued 3,00,000
Materials from other contract 1,00,000 Material returned to stores 20,000
Wages 2,50,000 Material at the end 8,000
Direct expenses 10,000 Plant in the end 2,00,000
Prepare Contract Account
17. From the following information prepare Contract Account:

`
Purchase of material 10,000
Wages paid 12,000
Plant sent to site 4,000
Closing value of plant 3,600

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