Campus Cellular provides cell phones and 1 year of cell serviceto students for an upfront, nonrefundable fee of $300 anda usage fee of $5 per month. Students may renew the servicefor each year they are on campus (on average, students renewtheir service one time). What amount of revenue shouldCampus Cellular recognize in the first year of the contract?

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Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.