The Importance of Job Costing to Freelancers
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This document discusses how using job costing can help businesses make more money by improving profitability calculations for projects. It defines job costing as a method for recording costs on specific projects. Business owners are advised to evaluate the profitability of completed projects to ensure they are pricing projects correctly and accounting for all costs. The document provides examples of how to use job costing to determine an hourly overhead rate and correctly assign costs to specific jobs. Overall, it emphasizes that job costing is an important tool for understanding project profitability.
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• Explain the use of predetermined overhead rates, calculate plant-wide and departmental factory overhead
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sch84920_02_c02_047-094.indd 47 7/31/17 1:44 PM
© 2017 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution.
48
Chapter Outline
2.1 Costing of Products and Services
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activities, then we can estimate the resources needed and the cost for those activities. Until now, we have
referred to employees who will perform the activities as resources. However, for the purpose of budgeting,
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• Understand why and how costs are attached to products and services.
• Describe how direct materials and direct labor are costed to products.
• Explain the use of predetermined overhead rates, calculate plant-wide and departmental factory overhead
rates, and identify differences among alternative measures for the denominator in the overhead rate.
• Explain why services or products should be costed for pricing purposes by using an overhead rate
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departments.
• Appreciate ethical issues involving cost allocation.
sch84920_02_c02_047-094.indd 47 7/31/17 1:44 PM
© 2017 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution.
48
Chapter Outline
2.1 Costing of Products and Services
2.2 Costing of Direct Costs
Costing of Direct Materials
Costing of Direct Labor
2.3 Costing Factory Overhead
Predetermined Overhead Rate
Disposition of the Overhead Variance
Multiple Overhead Rates
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2.6 Service Center Costs
Direct Method
Step (Sequential) Method
Reciprocal Method
Treatment of Revenues
Allocation of Costs by Behavior
2.7 Ethical Issues for Cost Allocation
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As a high school wrestling coach working in Florida, Greg Herman satisfied his love for
automobiles by working as an auto mechanic during the summer months. He also found
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began to boom, so Greg invested his savings in a new business, Greg’s Auto Repair.
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revenues. Greg does not know what his profit margins are for brake jobs, mufflers, and
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calculate our total project cost.
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referred to employees who will perform the activities as resources. However, for the purpose of budgeting,
resources could be people, materials, equipment, facilities, or licenses. Any activity could have multiple costs
associated with it. For example, painting a room would have labor costs, material costs, and equipment costs.
Other types of costs are facility costs, travel costs, or contingency costs. As another example, let’s suppose
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1. Individual managers must first create their own budgets, referencing past budgets and spending patterns while incorporating cost projections for the upcoming fiscal year. Upper-level managers and executives must then review all the budgets that managers submit, combining them to determine totals.
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Michael Economou is an Entrepreneur, with Business & Technology foundations and a passion for Innovation. He is working with his team to launch a new venture – Exyde, an AI powered booking platform for Activities & Experiences, aspiring to revolutionize the way we travel and experience the world. Michael has extensive entrepreneurial experience as the co-founder of Ideas2life, AtYourService as well as Foody, an online delivery platform and one of the most prominent ventures in Cyprus’ digital landscape, acquired by Delivery Hero group in 2019. This journey & experience marks a vast expertise in building and scaling marketplaces, enhancing everyday life through technology and making meaningful impact on local communities, which is what Michael and his team are pursuing doing once more with Exyde www.goExyde.com
Create a spend money transaction during bank reconciliation.pdf
Create a spend money transaction during bank reconciliation.
How To Leak-Proof Your Magazine Business
What You're Going to Learn
- How These 4 Leaks Force You To Work Longer And Harder in order to grow your income… improve just one of these and the impact could be life changing.
- How to SHUT DOWN the revolving door of Income Stagnation… you know, where new sales come into your magazine while at the same time existing sponsors exit.
- How to transform your magazine business by fixing the 4 “DON’Ts”...
#1 LEADS Don’t Book
#2 PROSPECTS Don’t Show
#3 PROSPECTS Don’t Buy
#4 CLIENTS Don’t Stay
- How to identify which leak to fix first so you get the biggest bang for your income.
- Get actionable strategies you can use right away to improve your bookings, sales and retention.
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The Importance of Job Costing to Freelancers
- 1. Making more MONEY with Job Costing! Samantha L. McCoy
- 2. First a short story……..well, two short stories.
- 3. Key Concept # 1- Profitability
- 5. Do you evaluate the profitability of each project once it is completed?
- 6. Evaluating your profitability on each project is the only way to determine two important business health checks……. 1. Are you pricing your projects correctly? 2. Are you accounting for all of your costs appropriately?
- 7. Key Concept # 2- Using Job Costing to determine Profitability with Project Costs
- 8. What is Job Costing? A method used to record costs on a specific project. Generally used in situations where each project is different and is performed to the customer's specification.
- 9. Job Costing Example # 1 ** Hourly Rate Assumption or Overhead Burden**
- 10. Job Costing Example # 2
- 11. Job Costing Example # 2A
- 12. Job Costing Example # 2B
- 13. Key Concept # 3- Job Costing to a Real Hourly Rate
- 14. What expenses do you include in your Hourly (Burden) Rate?
- 15. How do you calculate your expenses to include in your Hourly (Burden) Rate? Take the Monthly Expense Cost / by your average monthly hours Example: Phone/ Cable/ Internet $250.00/120 hours = $2.08 an hour
- 16. Job Costing to an Hourly Rate: Example # 1 Job Costing
- 17. Job Costing to an Hourly Rate: Example # 2
- 18. Summary: 1. Always Review Profitability on Your Jobs 2. Job Cost all Project Specific Costs 3. Job Cost Your Overhead Rate
- 19. Questions ???