#2 One Shot Revision š | Contract Costing | TYBCOM Exam Preparation Siraj Shaikh
1. Contract Costing (Used for Long-Term Projects) Contract costing is used when a business works on large projects like construction, roads, bridges, and buildings. Each contract is treated as a separate cost unit, and costs are recorded for materials, labor, and expenses related to that contract. Payments are received in stages, often based on work completed (work certified). Key concepts: Work-in-progress (WIP): Ongoing work that is not yet completed. Retention money: A part of the payment that the client holds back until the project is fully completed. Escalation clause: If material or labor costs increase, extra charges can be added to the contract price. Notional profit: Temporary profit calculated before the contract is completed. Why is Contract Costing important? Helps in tracking project expenses and profitability. Useful for construction companies and businesses handling big contracts. 2. Cost Control (Used for Managing and Reducing Costs) Cost control is the process of monitoring and reducing business expenses to increase profits. Businesses compare actual costs with budgeted costs to identify and correct overspending. It helps in improving efficiency and profitability. Methods of Cost Control: Budgetary Control: Setting a budget and comparing actual costs with it. Standard Costing: Setting standard costs for materials, labor, and overheads, then checking for cost variances. Break-even Analysis: Finding the sales level where total costs = total revenue (no profit, no loss). Inventory Control: Managing raw material and stock efficiently to avoid wastage. Why is Cost Control important? Helps businesses stay within budget. Prevents unnecessary expenses. Increases profits by reducing waste. i just hope you all must have liked the video, so do comment your view and do like and share the channel if you all feel worth sharing the channel. Donāt forget to subscribe our channel Ā Ā Ā /Ā sam4sirĀ Ā Ā Ā Ā /Ā channelĀ Ā Must check playlist for all other videos. ā£ļø Like, share or subscribe karna mat bhulna..!!! For notes and important questions join our telegram channel : Telegram : skyeducationofficial (in case of link failure just search by name) https://t.me/skyeducationofficial https://t.me/sirajshaikhdegreestudy Connect with me on all other social media networks Facebook : siraj shaikh Instagram : sam4sir00 Twitter : sirajsam4sir Snapchat : sam4sir (siraj shaikh) Telegram : sam4sir00