On July 1, 2021, Wildflower Corp. contracted to build an office for Heart, Inc. for a total contract price of P1,950,000. Estimated cost to complete Billings during the year Costs incurred to date How much is the realized gross profit in 2021? 2021 P 1,350,000 300,000 150,000 2022 P 800,000 1,100,000 1,200,000

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Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.