Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

Why Job Costing?

costing Job
0
Posted

Why Job Costing?

0

If you do not cost your projects, you are doing only half of the work. Only a few accounting programs offer what I would call a true job costing. In most cases, liabilities such as overhead, union costs, workmens compensation costs, direct and indirect material costs and fixed asset costs are not considered by the accounting program job costing module. This can leave a very serious hole in the actual cost of a job. For instance your $100,000 project costs out to $90,000 on your computer accounting program showing that you made $10,000. However, at the end of your accounting period your accountant calculates that all of the liabilities mentioned above for that period of work were 9% of the job. This total cost reduces your profit to a shaky $1,000 or less than 1% of the estimate. This is where job costing could have helped identify the problem BEFORE it occurred! If you have knowledge of a pending problem before it occurs, you can take steps to avoid or change the outcome. In the exampl

Related Questions

Thanksgiving questions

*Sadly, we had to bring back ads too. Hopefully more targeted.