What is Job Costing and Why is it Important?

Joanne Cipressi
Dec 13, 2018

In order to consistently produce a profit with custom products, you need to be aware of how much your jobs are costing you. Are you aware of how much money is actually being spent performing each job in your custom shop? This is basically what Job Costing is.

When you are aware of your job costs, you are better able to create accurate quotes that will be reasonable for your customers, as well as produce a profit for your customers. In addition, job costing gives you the opportunity to examine the costs of each job to see if there are ways to reduces the future job costs. So, what do your jobs cost? What actually is considered a job cost? 

Accumulation of materials, labor, and overhead are the three main areas that are included in job costing for most custom manufacturers. 

Materials: The sum of all material needed for a job which may include the following: ink, acrylic, MDO,  foamboard, fabric, PVC, vinyl, metal, paint and so on. 

Labor: The sum of direct labor that employees work on each job. 

Overhead. The sum of all non-direct costs for running your custom business. This can include rent, utility bills, indirect labor, machines, insurance and so on. 

When you can accurately figure the total of all of these costs, you can then know better what to quote your jobs, how you can possibly reduce costs and lessen waste. 

ShopVOX offers an excellent job costing tool that can easily break down each job cost for you. Watch this video to learn more:

How to Use Job Costing in shopVOX from TechVOX Inc on Vimeo.

Joanne Cipressi
13 / 12 / 2018
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