Contract costing query

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debit balances of the trial balance of a contractor for a particular contarct at the year end shows:

wages 180000

expenses 47000

and expenses are charged @ 25% of wages.

now what figures of wages and expenses will be debited in the contract account, whether-

1) wages for the year 47000/25%                    = 188000

    expenses for the year                                     =   47000

OR

2) wages for the year                                           = 180000

    expenses for the year 180000*25%             =   45000

   

Replies (1)

Wages for the year 180000

expenses @ 25% 45000

 

If it is particularly mentioned theat expenses are 25% of wages to the specific contract that do it as i said. it represents that the balance of Rs. 2000/- left in account is towards another contract or general expenses,etc


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