Question

_______ costing is suitable for bridge construction.

Hint:

Because contract costing projects often span multiple years, contractors must use specialized rules to calculate notional profit on work completed during the year, ensuring revenue is recognized fairly across accounting periods.

Answer 1

Step 1: Identifying the Attributes of Bridge Construction:
Bridge construction is characterized by:
• Scale and Location: It takes place on-site, away from the contractor's headquarters.
• Duration: Projects often extend across several months or years.
• Complexity: Every bridge project has highly specific architectural, geological, and material requirements.

Step 2: Selecting the Matching Costing Method:
Because of these unique traits, standard job costing must be adapted to track massive, long-term on-site projects. This specialized branch of job costing is called Contract Costing (also known as Terminal Costing).

Step 3: Conclusion:
Therefore, the blank must be filled with Contract, as Contract Costing is the standard accounting method used for large construction projects like bridges, roads, dams, and buildings.