At a glance
Job costing asks why a delivered job differed from its estimate. Keep approved customer changes, yield, labour, supplier, travel and rework effects separate so the next operational decision is based on evidence.
01 / Compare
Use consistent definitions.
Group revenue and direct-cost categories under the same job and revision basis.
| Measure | Relationship | Read carefully |
|---|---|---|
| Gross profit | Revenue minus direct cost | Not net profit |
| Gross margin | Gross profit divided by revenue | Selling-price basis |
| Markup | Gross profit divided by direct cost | Cost basis |
02 / Classify
Do not bury every difference in ‘overrun’.
Separate approved extra scope from estimate assumption, material yield, labour/process, supplier/schedule, installation/travel and rework or quality events. Link the evidence rather than relying on memory.
On the blank reconciliation, keep estimate_basis and actual_basis in the same units and against the same accepted version. If the bases differ, the variance column is not yet a lesson. Write the cause in cause_classification only after the evidence note says where the figures came from. Do not copy a target margin from this guide; it does not publish one.
03 / Act
Give the learning an owner.
Decide whether the variance changes a survey question, estimating basis, supplier decision, production control or installation plan. Review whether the change actually reduced recurrence.