Whenever a job is to be carried out, is it important that some important step-by-step tips are followed. This is to ensure efficiency in the management of resources to be associated with such job.
The main reason for costing a job is to ascertain the cost of doing the job and thereafter determine the profit margin on the job. With this, the following tips should be noted for job costing:
1. Assign a job number to the new job to be done. The reason is that you may be having more than one job at the same time, as in Construction Company. To enable you manage cost effectively, you need to be able to identify which cost relate to a particular job.
2. You have to prepare a job order. This will help you determine what is required to do the job in terms of material and human resources
3. Ascertain the direct cost/expenses that relate to the job
4. Ascertain the relevant factory overhead expenses to be apportioned to the job
5. Determine the admin and distribution expenses related to the job
6. Add up your profit margin to determine the sales price or contract price of the job.
The main reason for costing a job is to ascertain the cost of doing the job and thereafter determine the profit margin on the job. With this, the following tips should be noted for job costing:
1. Assign a job number to the new job to be done. The reason is that you may be having more than one job at the same time, as in Construction Company. To enable you manage cost effectively, you need to be able to identify which cost relate to a particular job.
2. You have to prepare a job order. This will help you determine what is required to do the job in terms of material and human resources
3. Ascertain the direct cost/expenses that relate to the job
4. Ascertain the relevant factory overhead expenses to be apportioned to the job
5. Determine the admin and distribution expenses related to the job
6. Add up your profit margin to determine the sales price or contract price of the job.
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