Job Costing
Helps To Keep Track
On Projects

Job Costing
The Sewer Contractor projects in Saudi Arabia are sometimes a high-risk work because it can easily spiral out of control causing the investor to lose money from a project that was projected to make a profit. Therefore, there is a need for a dairy monitoring of the work in every phase to be able to detect problems.

Also, it is a discrete calculation of cost done in batches in the construction industry. It is done by calculating the cost incurred on a certain job against the revenue produced. The costs are recorded in throughout the life of the batch or the job after which the costs are summarized before preparing the final job cost in the final trial balance.

The Benefits of Job Costing
It helps managers to project and keep track of lengthy and complex jobs by analyzing revenues, run reports and giving them access to reports. It helps the managers to garner useful information on maintenance and service and check on profitability. The analysis can be used to create accurate quotes when bidding for future jobs.

Furthermore, it helps in identifying the most profitable areas of the business and the least profitable ones. In this way, one can make choices to make the less profitable aspects more efficient. It helps ensure all costs involved in the job are invoiced to the customers. One can compare estimates to actual costs and revenues for analysis.


They are non-posting transactions that are prepared to show the customers the estimates of the projected cost before awarding the job. They also track cost during the progress of the job, for easy tracking of cost variation and to make sure that cost do not skyrocket. Quotes do not affect the general ledger or the financial statements.

Revenue is essential to the life of every business. It is categorized by customer, item, account and job this helps to analyze the revenues and cost of production. Matching categories of cost of contracts accounts should be created to be able to compare costs to revenues produced.

Fixed Fee Jobs:
This is an agreement between the contractor and the customer to complete the job for a pre determined price. Estimators who are experienced set prices that are high enough for covering contingencies, which may cause the price to go up.

Direct Cost:
This is the cost of the contracts, and it is mainly classified under (Labor, Material, Equipment Rental, Subcontractors and Other Cost). Under each classification, the accountant will create a listing which is meaningful to his work. They are categorized under the profit and loss report while indirect costs or overhead is the cost that is not identifiable in the contract cost. For example cost that had been incurred indirectly while completing the job, for example, insurance, administrative payroll and rent.

Standard Costs:
These are theoretical calculations that are done on a spreadsheet which gives an accurate picture of the jobs' direct costs. These costs are not reported in financial statements or the general ledgers.
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