Calculating profit per job in a construction company involves several steps. Here's a general guide on how to do it:
Relevant templates:
- Calculate your total revenue for the job: This includes all the money you received from the client for the specific project.
- Determine the total direct costs: These are the costs directly related to the project, such as materials, labor, and equipment.
- Calculate the total indirect costs: These are the overhead costs that are not directly related to the project, but still incurred during the project period, such as rent, utilities, and administrative expenses.
- Subtract the total direct and indirect costs from the total revenue: This will give you the gross profit for the project.
- Calculate your net profit: Subtract any other expenses, such as taxes or interest payments, from the gross profit to get your net profit.
- Divide the net profit by the number of jobs completed: This will give you the profit per job.
For example, if a construction company completes a job for $100,000 and the direct costs for the job were $60,000 and indirect costs were $10,000, the gross profit for the job would be $30,000 ($100,000 - $60,000 - $10,000). If the company had additional expenses of $5,000, the net profit would be $25,000. If the company completed 10 jobs in a given period, the profit per job would be $2,500 ($25,000 / 10 jobs).
Article found in General Industry.
