Work out job costing instantly with clear inputs, formula shown and shareable results.
Job costing accumulates cost against a specific order: direct materials, direct labour at the applicable rate, and overhead absorbed on a chosen basis — here labour hours. Prime cost is materials plus labour, and it is the figure to compare against a customer quote before overhead recovery.
Total job cost
Job cost = Direct materials + (Hours x Labour rate) + (Hours x Overhead rate)
Prime cost
Prime cost = Direct materials + Direct labour
Switch the absorption base to machine hours and enter the machine-hour overhead rate instead.
No — this is cost. Add the margin separately so cost overruns cannot be hidden inside the mark-up.