When It Is Probable That Total Contract Costs Will Exceed

question 46

True/False

When it is probable that total contract costs will exceed total contract revenue,the expected loss should not be recognised as an expense until the future economic sacrifice eventuates.

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Definitions:

Final Product

A good or service that has completed all stages of production and is ready for consumption by the end-user.

Labor Costs

The total sum of all wages, benefits, and taxes paid to employees by an employer for work performed.

Production Costs

The total expenses incurred in the manufacturing of a product, including labor, materials, and overhead.

Wage Rates

The standardized amount of compensation paid to an employee by an employer in exchange for labor, typically measured per hour or piece of work.