Job costing is an important thing concerning any project that required a lot of different things for the project to complete. It will try to track both cost and revenue in any specific project on hand. The simplest way to say it is that it will provide information on the amount of money to pay and to get out of an individual project. It is beneficial to make use of a job costing spreadsheet in the form of a template to make it easier to complete.
The idea of job costing can commonly be found in the industry of construction. The costs for the available jobs in that industry vary a lot so that calculating it will greatly help in terms of efficient spending. Yet, other fields of industry apply job costing as well because it offers a great insight in terms of spending money to get certain tasks or jobs done in any project. All in all, tracking all sorts of spending is always important in any business within the industry.
Creating an accurate job costing report through a job costing spreadsheet is not difficult at all. This project-based accounting certainly has its components to pay attention to. The general things that should be considered when making this kind of report include labor costs, material costs, and applied overhead. All of those things just need to be combined to eventually create a total sum of them. That total sub is the so-called job costing value which will be useful to plan the right business strategies.
Yet, determining each one of those things to sum is the tricky part of all. It takes serious efforts to get the exact number on that stuff. Accurate numbers in those three things will create a better total sum for the job costing. If the initial numbers are not accurate, the result of the job costing will not be accurate or good at all. So, it is important to pay attention to the proper ways in determining the labor costs, material costs, and applied overhead itself.
The labor costs for any job costing spreadsheet need to be calculated properly and accurately to get the best outcome in the end. To do so, just calculate the cost to employ all staff members who are working on the project per day. Multiply that cost with the number of days needed to complete the project by following the job estimation report on hand. That is the basic way to find the labor costs in any project within any business or industry.
The next cost to define is the material costs of the project. It seems pretty simple and easy but it is nothing like those at all. The simple idea is to only calculate all of the materials needed and used on the project. The example of materials for a construction project includes wood, lumber, screws, nails, and a lot more stuff. It is important to always keep the record of purchase upon buying materials for any project. That will be the source of information to get the accurate material costs for a project.
Furthermore, a job costing spreadsheet will need a clear amount of the so-called applied overhead. This is the most difficult one to calculate in comparison to the first two things. It is merely estimation with a set of clever thoughts on that estimation. Just think of anything such as office rent fee, administrative cost, and even the depreciation of the tools and equipment. All of those are included in this applied overhead that needs to be combined with the labor costs and material costs to eventually finish the job costing report.