Job costing: What are the recommended ways to cost out a job?

Episode 29 | Challenges: Process

Today’s episode of Making Chips features a listener question. You can leave your question for Jim and Jason to answer by going to to leave your question. They just might answer it on an upcoming podcast episode. Today’s question has to do with costing out a job. Is there a standard formula or way to price out jobs in light of workers who are manning more than one machine, etc.? Jim has years of experience in costing out jobs so he’s got a lot to share in this episode.

But first, some thoughts about the Making Chips growth curve

The Podcast has been going gangbusters. Jim and Jason are both amazed that there have been 13,00o downloads of the show that have happened since they first began. They're eager to put that influence to even more work for you as the show continues. So the guys first of all want to "thank you" for supporting the show and their work to inform, educate, and expand the manufacturing industry.

The guys also want to let you in on a materials sourcing company they've been working with. It's 24 hours a day you can go on this amazing website, receive materials quotes, and even order the products you need to fulfill your manufacturing orders.  Use the promo code from this episode and receive a 15% discount through the end of July 2015!

 Job costing

Do you know how to cost out a machining job? Do you understand how to figure in the wear on the machine, the cost of your overhead and operator wages, the type of material you’ll be using for the job, weight of the part you’re producing, and other variables? If you don’t, you need to listen carefully to this episode of Making Chips. Jim explains how he goes about costing out a job, including how he uses an excel spreadsheet to figure out the cost.

When you’re costing out a job, Jim has a powerfully practical tip to help you do the costing properly: take into consideration the size of the part you’re going to be working with on the job. A very large part is going to cost you more in terms of manpower and time. Jim sets a part of similar size on his desk to put the job into perspective. He’ll take it out to the machine and hold it up beside it to see how manageable it’s going to be. Don’t overlook this important consideration as you’re costing out a job in your shop. Listen in to find out more about how Jim goes about costing out jobs.

Costing out a job can also be a bit tricky when it comes to the type of material being used. Manufacturers need to keep in mind that material costs may differ widely when creating parts from various materials. That’s a variable that has to be kept in mind so you don’t under-cost a job and cost yourself the profit margin you should have. Jim shares his tips on how to go about doing that in this episode of Making Chips.

All this and more on this episode of Making Chips!

Here’s the outline this episode

  • The success of the podcast and a new supplier you can use -
  • A listener question about the topic of this episode: How do you cost out a job, are there recommended ways to go about it? What about when the same operator is working multiple machines? The listener also had a second question about a “lights out” machine and how to figure costs using that sort of setup.
  • Making Chips is going to hit the road the third week of July 21, 2015- going to San Diego, CA. If you live nearby, come check it out and meet Jason and Jim. Say, “If you’re not making chips, you’re not making money” to get a free T-shirt.
  • An invitation to anyone who is familiar with "lights out machining." Can you serve as a resource to the guys? If so, contact them at
  • Five things to consider on Job Costing: Quantity - Type of material - Tolerance - Size of the part you’re making - Complexity of the part
  • How often Jim evaluates his shop rates and the things he looks at to do the evaluation well.
  • How Jim trains others in his company to do job costing.
  • Is it possible to create computer software to do job costing?
  • An invitation to you: ask us your question on the making chips website.

Links mentioned on this episode - get your 15% discount by using the code from this episode (expires July 31, 2015)


Or call us at 312-725-0245

Tweets you can use to tell others about the episode

[shareable]#manufacturingnews - a new training facility in Buffalo, NY. Find out more on this episode[/shareable]

[shareable]#jobcosting can make or break your profit margin. Find out more on this episode[/shareable]

[shareable]Do you know how to cost out a job in your #manufacturing facility? Find out on Making Chips[/shareable]

[shareable]#Makingchips is going on the road to San Diego, CA. Find out when in this episode[/shareable]

[shareable]Have a #manufacturing question you’d like answered? Ask Jim and Jason here[/shareable]


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