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Financial

Job Costing

In Plain English

The process of tracking every cost on a project against the estimate to monitor profitability in real time.

Definition

Job costing is the accounting process of tracking all direct and indirect costs (labor, materials, equipment, subcontractors, overhead) against specific cost codes for a construction project to measure actual performance against the budget estimate. Real-time job cost reports allow project managers to identify overruns early and take corrective action. Accurate job costing data also improves future estimates.

Example

The job cost report showed the concrete scope was 18% over budget at midpoint, prompting the superintendent to retrain the forming crew on efficiency.

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