Manufacturing Job Costing

A manufacturing job shop that is a client of ours had a cost estimate per job, but it included lots of overhead allocations. The company could not separate out cash outlays from depreciation expense at the job level. This company was having a hard time getting new business and was bidding for jobs using traditional cost accounting measures. When business is soft and companies are not operating at full capacity, the cash expense of taking on an additional project may be much smaller than traditional cost accounting measures suggest. I advised them to bid lower on new projects, and business started improving right away. If your company needs assistance with job-costing or any other manufacturing issue, please give us call us and we will be able to provide assistance.