Job Costing
FinancialDefinition
The process of tracking all expenses associated with a specific service job to determine profitability.
Detailed Description
Job costing in field service accounts for all direct and indirect costs associated with service delivery, including labor, parts, travel, overhead allocation, and subcontractor expenses. Accurate job costing helps organizations identify profitable services, optimize pricing, control costs, and make informed decisions about service offerings. It requires detailed time tracking, parts consumption recording, mileage documentation, and overhead allocation methodologies.
Frequently Asked Questions
What costs should be included in job costing?
Include direct labor, parts, travel time, mileage, tools, equipment depreciation, overhead allocation, and any subcontractor costs.
How does job costing improve profitability?
It identifies unprofitable services, reveals cost overruns, supports accurate pricing, highlights efficiency opportunities, and guides resource allocation decisions.
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Conclusion
Understanding Job Costing is essential for effective field service management. This concept forms a fundamental part of modern field service management practices.
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