{"id":7156,"date":"2023-05-29T17:23:37","date_gmt":"2023-05-29T17:23:37","guid":{"rendered":"https:\/\/commerceiets.com\/?p=7156"},"modified":"2023-05-29T17:23:40","modified_gmt":"2023-05-29T17:23:40","slug":"calculation-of-profits-in-contract-costing","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/calculation-of-profits-in-contract-costing\/","title":{"rendered":"Calculation of Profits in Contract Costing &#8211; 5 cases explained"},"content":{"rendered":"\n<h2 class=\"wp-block-heading has-text-align-center\">Calculation of Profits in Contract Costing<\/h2>\n\n\n\n<p>The contracts may be complete or incomplete contracts. Profits are calculated in both cases differently which is as follows:<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/calculation-of-profits-in-contract-costing\/#ASCERTAINMENT_OF_PROFITS_ON_COMPLETED_CONTRACTS\" title=\"ASCERTAINMENT OF PROFITS ON COMPLETED CONTRACTS\">ASCERTAINMENT OF PROFITS ON COMPLETED CONTRACTS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/calculation-of-profits-in-contract-costing\/#ASCERTAINMENT_OF_PROFITS_ON_INCOMPLETE_CONTRACTS\" title=\"ASCERTAINMENT OF PROFITS ON INCOMPLETE CONTRACTS\">ASCERTAINMENT OF PROFITS ON INCOMPLETE CONTRACTS<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/calculation-of-profits-in-contract-costing\/#Incomplete_contracts_with_little_progress\" title=\"Incomplete contracts with little progress: \">Incomplete contracts with little progress: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/calculation-of-profits-in-contract-costing\/#Incomplete_contracts_with_appreciable_progress\" title=\"Incomplete contracts with appreciable progress: \">Incomplete contracts with appreciable progress: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/commerceiets.com\/calculation-of-profits-in-contract-costing\/#Incomplete_contracts_nearing_completion\" title=\"Incomplete contracts nearing completion: \">Incomplete contracts nearing completion: <\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"ASCERTAINMENT_OF_PROFITS_ON_COMPLETED_CONTRACTS\"><\/span><strong>ASCERTAINMENT OF PROFITS ON COMPLETED CONTRACTS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Profit on Completed Contracts: In case of contracts completed during the accounting year, the contract price, whether payable in lump sum on the completion of contract or payable by instalments, all be debited to the Contract\u00e9e&#8217;s Personal Account and credited to the Contract Account. The difference between the total of the two sides of Contract Account shall be transferred to Profit the Loss Account of the contractor by way of profit or loss.<\/p>\n\n\n\n<p>Sometimes, under the terms of the agreement, the contractor undertakes to rectify the defects, if any, in the contract work which may arise during a specified period (known as Maintenance Period) after the date of the completion of the contract. The amount of profit or loss on contracts in such a case should be scertained only after making a sufficient provision for cost of maintenance expected to be incurred during be maintenance period.<\/p>\n\n\n\n<p>The ascertainment of profits on completed contracts in contract costing involves determining the actual profit earned on a specific contract once it has been completed. It is an essential process in evaluating the financial performance of a project and assessing the profitability of a contractor&#8217;s operations. Here are the key steps involved:<\/p>\n\n\n\n<ol type=\"1\" start=\"1\">\n<li><strong>Cost Allocation<\/strong>: Calculate the total costs incurred in executing the contract. This includes direct costs, such as labor, materials, subcontractor expenses, and equipment, as well as indirect costs, such as overhead expenses and administrative costs. Proper allocation of costs to the specific contract is crucial to accurately determine the profitability.<\/li>\n\n\n\n<li><strong>Revenue Recognition:<\/strong> Identify the total revenue generated from the contract, which may include progress billings, milestone payments, or final payment upon completion. Ensure that all relevant revenue is correctly accounted for and attributed to the specific contract.<\/li>\n\n\n\n<li><strong>Adjustments:<\/strong> Make any necessary adjustments to the costs or revenue recognized during the contract period. This may involve accounting for changes in scope, variations, or any other contract amendments that impact the overall financials. Adjustments may also include accounting for claims, warranties, or penalties, if applicable.<\/li>\n\n\n\n<li><strong>Profit Calculation:<\/strong> Subtract the total costs allocated to the contract from the total revenue recognized to obtain the gross profit for the completed contract. The gross profit represents the financial gain or loss resulting from the project.<\/li>\n\n\n\n<li><strong>Profit Margin Analysis:<\/strong> Evaluate the gross profit as a percentage of the total revenue to determine the profit margin on the completed contract. This metric provides insights into the profitability and efficiency of the project execution.<\/li>\n\n\n\n<li><strong>Comparison and Analysis:<\/strong> Compare the actual profit earned on the completed contract with the estimated or targeted profit initially set for the project. Analyze the reasons for any variances and assess the effectiveness of cost control measures, pricing strategies, and project management practices.<\/li>\n\n\n\n<li><strong>Reporting and Documentation: <\/strong>Document the results of the profit ascertainment process in financial reports, project evaluations, or management reviews. These reports provide crucial information for decision-making, performance assessment, and future contract bidding or pricing strategies.<\/li>\n<\/ol>\n\n\n\n<p>The ascertainment of profits on completed contracts in contract costing helps contractors assess the financial success of their projects, identify areas for improvement, and inform future business decisions. It allows for a comprehensive evaluation of the financial performance of individual contracts, as well as overall profitability at the project or company level.<\/p>\n\n\n\n<p><strong>Example<\/strong><\/p>\n\n\n\n<p>The Contract Ledger of a company showed the following particulars in respect of Contract No. 50 which was commenced on 1 April, 2010:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Materials issued<\/td><td>76,000<\/td><\/tr><tr><td>Direct wages<\/td><td>80,000<\/td><\/tr><tr><td>Cost of special plant<\/td><td>20,000<\/td><\/tr><tr><td>Chargeable expenses<\/td><td>7,000<\/td><\/tr><tr><td>Establishment charges<\/td><td>5,000<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is completed<\/figcaption><\/figure>\n\n\n\n<p>The contract was completed by 31<sup>st<\/sup> March, 2011 and the contract price was \u20b92,00,000. The value of materials and plant returned to store on 31<sup>st<\/sup> March, 2011 was \u20b96,000 and \u20b912,000 respectively. Contract price received in full on 31<sup>st<\/sup> March.<\/p>\n\n\n\n<p><strong>Solution: Contract Account and Contractee\u2019s Account<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td colspan=\"4\"><strong>CONTRACT NO. 50 ACCOUNT<\/strong><\/td><\/tr><tr><td><strong>Particulars<\/strong><\/td><td>\u20b9<\/td><td><strong>Particulars<\/strong><\/td><td>\u20b9<\/td><\/tr><tr><td>To materials issued To direct Wages To cost of special plant To chargeable expenses To establishment charges To Profit and Loss account<\/td><td>76,000 80,000 20,000 7,000 5,000 30,000<\/td><td>By materials to store By value of plant returned to store By Contractee\u2019s account (Contract Price)<\/td><td>6,000 12,000 &nbsp; 2,00,000<\/td><\/tr><tr><td>&nbsp;<\/td><td>2,18,000<\/td><td>&nbsp;<\/td><td>2,18,000<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is completed<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td colspan=\"4\"><strong>CONTRACTEE\u2019S ACCOUNT<\/strong><\/td><\/tr><tr><td><strong>Particulars<\/strong><\/td><td>\u20b9<\/td><td><strong>Particulars<\/strong><\/td><td>\u20b9<\/td><\/tr><tr><td>To Contract Account No. 50 A\/c &nbsp;<\/td><td>2,00,000<\/td><td>By Bank Account<\/td><td>2,00,000<\/td><\/tr><tr><td>&nbsp;<\/td><td>2,00,000<\/td><td>&nbsp;<\/td><td>2,00,000<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is completed<\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"ASCERTAINMENT_OF_PROFITS_ON_INCOMPLETE_CONTRACTS\"><\/span><strong>ASCERTAINMENT OF PROFITS ON INCOMPLETE CONTRACTS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As a rule, profits on incomplete contracts should not he take credit for. A number of arguments are given against the calculation of profits on incomplete contracts. the anticipation of profits is against the general accounting principles. Secondly, the true profit on a contract cannot be ascertained until a contract is finished since a contract which appears to be profitable in its early stages may finally result into a loss on account of unexpected losses. Lastly, income tax will be paid profits a at an earlier date than would otherwise be necessary.<\/p>\n\n\n\n<p>But it is counter-argued that by including profit on incomplete contracts in the Profit and Loss Account, undue fluctuations in the profits and dividends paid can be avoided. Secondly, some contracts may ale several years to complete and if profits are calculated on such contracts on completion, it shall appear the entire amount of profit has been earned in one year, which is not correct. Therefore, profits on complete contracts should be calculated very cautiously and only a portion of it may be credited to Profit and Loss Account.<\/p>\n\n\n\n<p>The computation of profit on incomplete contracts has two aspects:<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"900\" height=\"257\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-1.png\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7157\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-1.png 900w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-1-300x86.png 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-1-768x219.png 768w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<p><strong>Computation of notional profit at the end of the accounting period in incomplete contract: <\/strong>For this purpose, the value of certified work and cost of uncertified work at the end of the accounting period are credited to the Contract Account. The amount of notional profit shall be:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Value of work certified<\/td><td>XXX<\/td><\/tr><tr><td>Add: Cost of work not yet certified<\/td><td>XXX<\/td><\/tr><tr><td>&nbsp;<\/td><td>XXXX<\/td><\/tr><tr><td>Less: Total cost of contract to sale<\/td><td>XXX<\/td><\/tr><tr><td><strong>Notional Profit<\/strong><\/td><td><strong>XXX<\/strong><\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<p><strong>Computation of the proportion of the notional profit to be transferred to profit and loss account:<\/strong><\/p>\n\n\n\n<p>The entire amount of notional profit at the end of the accounting period is not transferred to profit and loss account. In view of the future uncertainties involved in the contract work, only a portion of the notional profit is transferred to Profit and Loss Account and the remaining portion is kept by the way of provision to cover future contingencies.<\/p>\n\n\n\n<p><strong>Principles to be followed for the purpose of ascertaining the proportion of notional profit to be transferred to Profit and Loss Account:<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"909\" height=\"346\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-2.png\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7164\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-2.png 909w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-2-300x114.png 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-2-768x292.png 768w\" sizes=\"(max-width: 909px) 100vw, 909px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Incomplete_contracts_with_little_progress\"><\/span><strong><em>Incomplete contracts with little progress: <\/em><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>These are the contracts which has just commenced or where only small portion of the contract or less than 1\/4<sup>th<\/sup> of the contract has been finished. In case of such contracts, it is not prudent to take credit for any profit made thereon, since it is impossible to see the future position of such contracts clearly. The entire amount of the notional profit on such contracts is kept by way of provision for contingencies is transferred to the credit of the Work-in-progress account to bring down to its actual cost.<\/p>\n\n\n\n<p>On 1<sup>st<\/sup> April 2012 Contractors Ltd. commenced to build a cinema hall, the contract price being \u20b96,00,000. During the year ended 31<sup>st<\/sup> March, 2013, they incurred the following expenses:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Materials purchased directly<\/td><td>50,000<\/td><\/tr><tr><td>Materials issued form stores<\/td><td>10,000<\/td><\/tr><tr><td>Direct wages<\/td><td>42,000<\/td><\/tr><tr><td>Plant<\/td><td>10,000<\/td><\/tr><tr><td>Overhead charges<\/td><td>3,000<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<p>Work to the value of \u20b91,20,000 had been certified on 31<sup>st<\/sup> March, 2013 of which 75% had been received in cash. Cost of work completed but not certified was \u20b910,500. Materials valued at \u20b95,000 were on hand at site. After allowing depreciation @20% per annum on plant, prepare contract accounts.<\/p>\n\n\n\n<p><strong>Solution:<\/strong><\/p>\n\n\n\n<p><strong>CONTRACT ACCOUNT<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Particulars<\/strong><\/td><td>\u20b9<\/td><td><strong>Particulars<\/strong><\/td><td>\u20b9<\/td><\/tr><tr><td>To materials purchased<\/td><td>50,000<\/td><td>By materials at site<\/td><td>5,000<\/td><\/tr><tr><td>To materials issues from stores<\/td><td>10,000<\/td><td>By plant at site<\/td><td>8.000<\/td><\/tr><tr><td>To direct wages<\/td><td>42,000<\/td><td>By work in progress account: Value of work certified= 1,20,000 Cost of uncertified work= 10,500<\/td><td>&nbsp; &nbsp; 1,30,500<\/td><\/tr><tr><td>To plant (cost)<\/td><td>10,000<\/td><td>&nbsp;<\/td><td>&nbsp;<\/td><\/tr><tr><td>To overhead charges<\/td><td>3,000<\/td><td>&nbsp;<\/td><td>&nbsp;<\/td><\/tr><tr><td>To work-in-progress account (Profit reserved)<\/td><td>28,500<\/td><td>&nbsp;<\/td><td>&nbsp;<\/td><\/tr><tr><td>&nbsp;<\/td><td><strong>1,43,500<\/strong><\/td><td><\/td><td><strong>1,43,500<\/strong><\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<p><strong>WORK-IN-PROGRESS ACCOUNT<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Particulars<\/strong><\/td><td>\u20b9<\/td><td><strong>Particulars<\/strong><\/td><td>\u20b9<\/td><\/tr><tr><td>To contract account: Value of work certified= 1,20,000 Cost of uncertified work= 10,500<\/td><td>&nbsp; &nbsp; 1,30,500<\/td><td>By contract account (Profit reserved)<\/td><td>28,500<\/td><\/tr><tr><td>&nbsp;<\/td><td>&nbsp;<\/td><td>By balance c\/d<\/td><td>1,02,000<\/td><\/tr><tr><td>&nbsp;<\/td><td><strong>1,30,500<\/strong><\/td><td><\/td><td><strong>1,30,500<\/strong><\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Incomplete_contracts_with_appreciable_progress\"><\/span><strong><em>Incomplete contracts with appreciable progress:<\/em><\/strong> <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>A contracts is generally said to have made the appreciable progress if the work completed is at least \u00bc of the contract. The proportion of the notional profit to be transferred to Profit and Loss account can be calculated as follows:<\/p>\n\n\n\n<p>Work certified between 1\/2 and \u00bc:When work certified is \u00bc or more than \u00bc but less than \u00bd of the contract price, the amount of profit to be transferred to Profit and Loss account should be:<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"620\" height=\"115\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/1.png\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7165\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/1.png 620w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/1-300x56.png 300w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/figure>\n\n\n\n<p>Work certified is more than \u00bd: When work certified is \u00bd or more than \u00bd of the contract price, but the contract is not nearing completion, the profit to be transferred to Profit and Loss account should be:<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"621\" height=\"117\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/2.png\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7166\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/2.png 621w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/2-300x57.png 300w\" sizes=\"(max-width: 621px) 100vw, 621px\" \/><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Incomplete_contracts_nearing_completion\"><\/span><strong><em>Incomplete contracts nearing completion:<\/em><\/strong> <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>There are the contracts which are nearing completion but the future costs to be incurred on their completion can be reasonably be estimated. The amount of profit to be transferred to Profit and Loss Account, in this case shall be ascertained based on estimated profit. \u201cEstimated profit\u2019 in case of contract nearing completion is the difference between contract price and the total estimated cost of contract on completion and can be ascertained as follows:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Total contract price<\/td><td>Xxx<\/td><\/tr><tr><td>Less: Estimated cost of contract on completion<\/td><td>Xxx<\/td><\/tr><tr><td>Estimated profit on completion<\/td><td>=xxx<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing<\/figcaption><\/figure>\n\n\n\n<p>The calculation of estimated cost of contract on completion shall be calculated as follows:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Net expenditure incurred on contract to date<\/td><td>Xxx<\/td><\/tr><tr><td>Add: Estimated expenditures yet to be incurred to complete the contract<\/td><td>Xxx<\/td><\/tr><tr><td>Estimated cost of contract on completion<\/td><td>=xxx<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing<\/figcaption><\/figure>\n\n\n\n<p>Moreover, only a proportion of the estimated profit to be transferred to profit and loss account, leaving the balance to guard against future contingencies. The proportion of estimated profit to be transferred to Profit and Loss account can be calculated by any of the following formulae:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"219\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-3-1024x219.png\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7167\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-3-1024x219.png 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-3-300x64.png 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-3-768x165.png 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-3-1536x329.png 1536w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/image-3.png 1577w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/cost-accounting\/\">Cost Accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-cost-accounting-pdf\/\">Scope of cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/elements-of-cost\/\">Elements of cost<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/types-of-cost\/\">Types of cost<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/material-control-in-cost-accounting-pdf\/\">Material control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perpetual-inventory-system\/\">Perpetual inventory system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/pricing-of-materials\/\">Pricing of materials<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/bin-card\/\">Bin Card<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/store-ledger\/\">Stores Ledger<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/incentive-plans\/\">Incentive plans<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/overhead\/\">Overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-treatment-of-idle-time\/\">Idle time<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/system-of-wage-payment-in-cost-accounting\/\">System of wage payment in cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-time-rate-system-and-piece-rate-system\/\">Time rate vs piece rate wage system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-centre\/\">Cost Center<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/labor-turnover\/\">Labour Turnover<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/\">Difference between management accounting and cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/allocation-and-apportionment-of-overheads\/\">Allocation and apportionment of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-allocation-and-apportionment-of-overheads\/\">Allocation vs Apportionment of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/absorption-of-overheads\/\">Absorption of overheads<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/over-absorption-and-under-absorption-of-overheads\/\">Over absorption and under absorption of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/activity-based-costing\/\">Activity based costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-traditional-costing-and-activity-based-costing\/\">Traditional costing vs ABC system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/reconciliation-of-accounts\/\">Reconciliation of accounts<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/unit-costing\/\">Unit costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-sheet-format\/\">Cost sheet format<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-sheet-vs-production-account\/\">Cost sheet vs production sheet<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/job-costing\/\">Job costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/batch-costing\/\">Batch Costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-job-costing-and-batch-costing\/\">job costing vs batch costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/contract-costing\/\">Contract costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-job-costing-and-contract-costing\/\">Job Costing vs Contract costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/process-costing\/\">Process Costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-costing-vs-job-costing\/\">Process costing vs job costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/joint-products\/\">Joint products<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/by-products\/\">By Product&nbsp;<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/equivalent-production\/\">Equivalent production<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/marginal-costing\/\">Marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/applications-of-marginal-costing\/\">Application of marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-volume-profit-analysis\/\">Cost volume profit analysis<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/tools-and-techniques-of-marginal-costing\/\">Tools and techniques of marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/budget\/\">Budget<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/break-even-point\/\">Break even point<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-of-budgetary-control\/\">Process of budgetary control<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/explain-the-advantages-and-limitations-of-budgetary-control\/\">Advantages and limitations of budgetary control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/budgetary-control\/\">Budgetary Control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/\">Zero base budgeting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/standard-costing\/\">Standard Costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/variance-analysis\/\">Variance Analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-standard-costing-and-budgetary-control\/\">Standard costing vs budgetary control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/\">Management accounting vs cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-financial-accounting-management-accounting-and-cost-accounting\/\">Cost accounting vs financial accounting<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/why-cost-accounting-is-necessary-best-detailed-explanation\/\">Why cost accounting is necessary<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/essentials-of-a-good-costing-system\/\">Essentials of good costing system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/objectives-and-advantages-of-cost-accounting\/\">objectives and advantages of cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/meaning-and-scope-of-cost-accountancy-pdf\/\">scope of cost accountancy<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/cost-accounting-is-an-indispensable-tool-of-modern-management\/\">Cost accounting is an indispensable tool of modern management<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/while-financial-accounting-is-external-cost-accounting-is-internal-to-the-business-discuss\/\">While financial accounting is external, cost accounting is internal to the business.<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/nature-and-advantages-of-cost-accounting\/\">Explain nature and advantages of cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-accounting-is-becoming-more-and-more-relevant-in-emerging-scenario-in-india\/\">Cost accounting in emerging scenario of India<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/objectives-of-cost-accounting\/\">Objectives of cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/methods-of-cost-accounting-and-their-adaptability-in-different-industries\/\">Methods of cost accounting and their adaptability in different industries<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/meaning-of-escalation-clause-in-contract-costing\/\">Escalation clause in contract costing<\/a><\/td><td><\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-gallery has-nested-images columns-default is-cropped wp-block-gallery-1 is-layout-flex wp-block-gallery-is-layout-flex\">\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7168\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide1-13-1024x576.jpg\" alt=\"\" class=\"wp-image-7168\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide1-13-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide1-13-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide1-13-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide1-13.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7171\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide2-9-1024x576.jpg\" alt=\"\" class=\"wp-image-7171\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide2-9-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide2-9-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide2-9-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide2-9.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7180\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide3-8-1024x576.jpg\" alt=\"\" class=\"wp-image-7180\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide3-8-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide3-8-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide3-8-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide3-8.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7182\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide4-9-1024x576.jpg\" alt=\"\" class=\"wp-image-7182\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide4-9-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide4-9-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide4-9-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide4-9.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7183\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide5-8-1024x576.jpg\" alt=\"\" class=\"wp-image-7183\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide5-8-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide5-8-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide5-8-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide5-8.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7176\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide6-7-1024x576.jpg\" alt=\"\" class=\"wp-image-7176\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide6-7-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide6-7-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide6-7-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide6-7.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7177\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide7-6-1024x576.jpg\" alt=\"\" class=\"wp-image-7177\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide7-6-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide7-6-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide7-6-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide7-6.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7174\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide8-6-1024x576.jpg\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7174\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide8-6-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide8-6-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide8-6-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide8-6.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7181\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide9-3-1024x576.jpg\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7181\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide9-3-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide9-3-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide9-3-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide9-3.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7172\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide10-2-1024x576.jpg\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7172\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide10-2-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide10-2-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide10-2-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide10-2.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7170\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide11-2-1024x576.jpg\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7170\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide11-2-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide11-2-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide11-2-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide11-2.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7178\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide12-1-1024x576.jpg\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7178\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide12-1-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide12-1-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide12-1-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide12-1.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7169\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide13-1-1024x576.jpg\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7169\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide13-1-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide13-1-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide13-1-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide13-1.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7175\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide14-1-1024x576.jpg\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7175\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide14-1-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide14-1-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide14-1-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide14-1.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7179\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide15-1-1024x576.jpg\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7179\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide15-1-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide15-1-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide15-1-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide15-1.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-id=\"7173\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide16-1-1024x576.jpg\" alt=\"Calculation of Profits in Contract Costing When contract is not completed\" class=\"wp-image-7173\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide16-1-1024x576.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide16-1-300x169.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide16-1-768x432.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2023\/05\/Slide16-1.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Calculation of Profits in Contract Costing When contract is not completed<\/figcaption><\/figure>\n<\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Calculation of Profits in Contract Costing The contracts may be complete or incomplete contracts. Profits are calculated in both cases differently which is as follows: ASCERTAINMENT OF PROFITS ON COMPLETED CONTRACTS Profit on Completed Contracts: In case of contracts completed during the accounting year, the contract price, whether payable in lump sum on the completion&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/calculation-of-profits-in-contract-costing\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;Calculation of Profits in Contract Costing &#8211; 5 cases explained&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":7163,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[187],"tags":[541,542,539,540],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/7156"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=7156"}],"version-history":[{"count":4,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/7156\/revisions"}],"predecessor-version":[{"id":7186,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/7156\/revisions\/7186"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/7163"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=7156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=7156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=7156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}