Job cost sheet definition
/What is a Job Cost Sheet?
A job cost sheet is a compilation of the actual costs of a job. The report is compiled by the accounting department and distributed to the management team, to see if a job was correctly bid. The sheet is usually completed after a job has been closed, though it can be compiled on a concurrent basis. The actual costs of a job typically include the following items:
Shipping and handling
Supplies
Employee benefits
Outsourced costs
Allocated overhead costs
A job cost sheet can be quite complex to create, since it may involve different labor rates for dozens of people, as well as a labor allocation for the payroll taxes and benefits incurred by those people, and overtime, plus potentially hundreds of components that should include the cost of shipping and handling. Depending upon the format of the job cost sheet, it may also include subtotals of costs for direct materials, direct labor, and allocated overhead. The sheet also computes the final profit or loss on the job by subtracting all of the compiled costs from a total of all billings to the customer.
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How a Job Cost Sheet is Used
The job cost sheet is most commonly developed using an electronic spreadsheet, based on a standard template that includes a number of standard items, so that the cost accountant is reminded to include them. Software packages are available that perform this task, and which automatically populate some fields in the compilation.
Advantages of Using Job Cost Sheets
There are several advantages to using job cost sheets, which are as follows:
Audit basis. Auditors use job cost sheets as their main source document when conducting audits of jobs.
Cost control. Because they precisely specify the costs incurred for a job, job cost sheets are a good source of information for those wanting to control costs.
Foundation for pricing. Job cost sheets can be compared to the prices charged to customers, to see if jobs were correctly bid. If not, management can devise better price quoting methodologies that make it more likely that similar job quotes will result in profits in the future.
Terms Similar to Job Cost Sheet
A job cost sheet is also known as a cost sheet.