What does the contract cost?
The cost of the contract, sometimes called the costs of the terminal, is the amount that will be a contract of contract. This type of contract is used by companies that perform some type of construction within the services they offer, because these types of jobs are almost always carried out on the basis of a contract. This may include any type of construction, including boat construction, aircraft construction, road construction and dams. The term usually applies to longer -term contracts.
When the company accepts a contract, many factors need to be considered. First, the work will be based on a contract with another society or possible government institution. For the purposes of accounting, the required costs will be calculated for the contract, unlike the total accounting carried out annually. This allows the contracting company to provide a contracting authority, company or government contract, estimate their costs. It also gives the company to conclude the contract an easier way to calculate profits for costs. Another key factor is material costsl. This is a little harder to calculate, because sometimes the materials can be used from another contract, or there may be an excess from the current contract.
other factors are usually included as direct costs. Typical examples are the cost of renting equipment or office at the construction site. Other costs will also be included, such as the price of hiring subcontracting or extra work.
There are generally two types of contract costs. The most common is the price at a fixed price. This is used when planning a contract and it is a standard type of contract. The second type is known as the cost of PLUS costs. Sometimes it is called a lime and line contract, Wslepice is used there is an urgent need, such as repairing aircraft or ship or creating a new product or part, and the more common ones in the construction of aircraft and ships.
The cost of a fixed -price contract is calculated and then usually approves an architect or engineer. AfterwardsIt will be dulled for approval by both parties involved. Upon approval, the supplier will be kept by the account magazine to monitor costs and profit on the basis of its annual or quarterly calculation, which can be cumbersome. The PLUS costs will include the project for the PLUS project, usually calculated as a percentage of the total cost, due to the specialized nature of the contract.