Question
Contract Accounts takes and captures which among the
following costs?Solution
If the contract used some of the indirect expenses that are incurred not specifically for the contract, then on the basis of the consumption of these expenses, the indirect costs will be absorbed into the contract. Example the rent paid for the store house is 5000 units and for the contract, the contractor kept 2000 units in the store, then (2000/5000) = 40% of the rent will be absorbed on the contract.
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