Mathematics · Contract Costing
A construction firm entered a ₹20,00,000 contract in January 2024, expected to complete in 3 years. Due to a 30% increase in material prices and 10% rise in labour rates, the escalation clause allows for compensation of 60% of the increased cost. By March 2025, the total material and labour cost increased by ₹3,00,000 due to price rise. What additional amount should be credited to the Contract Account under the escalation clause?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1₹1,80,000✓
- 2₹2,40,000
- 3₹3,00,000
- 4₹1,20,000
Correct answer
₹1,80,000
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