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Know If You Made a Profit: Job Costing Essentials

Know If You Made a Profit: Job Costing Essentials. Panelists : Jonas Hutchison, CERP , Party Reflections, Charlotte, North Carolina Lacey Wright, CERP , Celebrations! Event Rentals & Tents, Roseville, California William Pretsch , Mahaffey Tent Rentals, Memphis, Tennessee.

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Know If You Made a Profit: Job Costing Essentials

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  1. Know If You Made a Profit: Job Costing Essentials Panelists: Jonas Hutchison, CERP, Party Reflections, Charlotte, North Carolina Lacey Wright, CERP, Celebrations! Event Rentals & Tents, Roseville, California William Pretsch, Mahaffey Tent Rentals, Memphis, Tennessee Educational Session Sponsors: TopTec Products Alert Management Systems Aztec Tents Seitz, The Fresher Company
  2. Booth #2725 Please remember to thank these educational session sponsors Booth #2346 Booth #3720 Booth #3740
  3. Know If You Made a Profit: Job Costing Essentials Panelists: Jonas Hutchison, CERP, Party Reflections, Charlotte, North Carolina Lacey Wright, CERP, Celebrations! Event Rentals & Tents, Roseville, California William Pretsch, Mahaffey Tent Rentals, Memphis, Tennessee Educational Session Sponsors: TopTec Products Alert Management Systems Aztec Tents Seitz, The Fresher Company
  4. What is Job Costing? presented by Jonas Hutchison, CERP

  5. What is job costing?

    A job-specific costing technique, used in situations where each job is different and is performed to the customer’s expectations. Helps to determine if your pricing model works effectively. Can be used as a training tool for both sales and operations.
  6. Labor – Consider those positions that touch your inventory. Those associates are considered your direct labor which is needed to compute your job profitability. Supplies – Any supply that is used on your inventory as it goes in and out of your building is considered a direct cost. For example, hangers in the laundry, plastic wrap for your tents or chairs and chemicals in your laundry and kitchen. Also consider items needed while on a job site. Everyone of us has guys that are keeping hardware stores in business. These expenses need to be included if they are job related. Where to start?
  7. Transportation – We consider Maintenance, Repairs and Fuel a direct cost. Some may consider insurance, property tax and registration fee’s also, but we do not. Inventory Wear & Tear – We define a rental life for every piece of inventory. Our rental life is defined by the number of rentals the item will typically get before it’s either broken (not repairable) or not up to quality standards. Travel – Lodging, Meals, Airline, etc. Where to start? - Continued
  8. Calculating the Numbers Labor Warehouse We assign a cost to staging, cleaning, loading and unloading in our POS Formula: Qty Rented X Cost per Activity (Staging, Cleaning, Loading, Unloading) Field Formula: Number of Guys X Number of Hours X Average Fully Loaded Field Rate OR In your payroll system you may be able to assign a job name to each associate and the hours worked on a particular job.
  9. Supplies (Use one of these methods for each department) Two different ways to calculate: First, get two numbers for each of your departments. The gross revenue for 2013 and the amount you spent on supplies for that department. Use the two numbers to get the amount of expense in every $ of revenue. Formula: Cost of Linen Supplies / Linen Revenue For example: $25,000/$250,000 = $0.10 which means for every $1 in revenue the department spends $0.10 in supplies. Second method is specifically finding out what it costs to clean and restock each piece of linen. How much is the hanger, the bag, the tag, the chemicals, the water, etc. Calculating the Numbers
  10. Calculating the Numbers Transportation Add together your maintenance, repairs and fuel costs for 2013 and find out how many miles your trucks hauled during 2013. Formula: Transportation Costs / Truck Miles For example: $150,000/300,000 = $0.50 which means for every mile in truck usage the company spends $0.50 on the truck.
  11. Calculating the Numbers Inventory Wear & Tear Formula: Purchase Price / Rental Life For example: an item has a rental life of 50 rentals and has a purchase price of $100. $100 / 50 = $2 cost per rental
  12. Time for Questions for Jonas
  13. $5,000 to $25,000 jobs presented by Lacey Wright, CERP
  14. Case Study #1 New Year’s Eve Party: Contract #32792 Job Location: about 1 hour away
  15. Job Cost Report – Contract #32792
  16. Case Study #2 Non-Profit Fundraiser: Contract #34999 Job Location: about 2 hours away
  17. Job Cost Report – Contract #34999
  18. How do we use job costing to benefit our business? Bidding Events Salesman Reviews Inventory Price Adjustments Inventory Utilization Adding New Product Education
  19. Time for Questions for Lacey
  20. > $25,000 job presented by William Pretsch
  21. Lessons Learned: BIG jobs aren’t always good jobs Qualify the client Know the opportunity costs Beware of EGO Sub-rent for profitable growth What could possibly go wrong? Control your destiny
  22. Time for Questions for William
  23. Time for Overall Questions
  24. NextSession Room S320 Keynote Address Susan Southerland Reception 6 p.m. – 8 p.m. Café TuTu Tango Shuttle service from all Show hotels except those within walking distance. Advance registration and ticket required.
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