Business · Calculator
Job Costing Calculator
A price that covers materials and hours but not overhead is a break-even job wearing a margin. This adds the parts that get left out, then works the price back from the margin you want.
Run it with your own numbers.
A price that covers materials and hours but not overhead is a break-even job wearing a margin. This adds the parts that get left out, then works the price back from the margin you want.
Direct cost first
Hours multiplied by your hourly cost, plus materials and travel. This is what the job consumes before anything is set aside for the business that made it possible.
Overhead and the price
Overhead is entered rather than assumed, because how much of it a job should carry is a judgement about your own business. The price is then worked back from the margin, so that the margin is a decision rather than a leftover.
What it will not tell you
Whether the customer will pay it. This computes the price your costs and target imply; the market decides separately, and the gap between those two numbers is the actual business problem.
Real questions, short answers.
What should I put for overhead?
A share of what the business costs to run whether or not this job exists - rent, phone, insurance, unbilled time. Divide the monthly total by the jobs you expect in a month and start there.
Is my hourly cost the same as what I charge?
No. It is what an hour of your time costs you, before margin. Charging it back at cost is how a busy month ends with nothing in it.
Why is margin a percentage of price rather than cost?
Because that is how margin is normally quoted, and confusing it with mark-up on cost is the most common pricing error there is.
The All Frontier Global estate
Developed by Amit Jain at allfrontierglobal.com