What Is Job Costing? Definition & Guide
Quick Definition
Job costing is the process of tracking all costs associated with a specific countertop fabrication job - including materials, labor, machine time, overhead, and any rework - to determine the actual profit or loss on that individual project. In countertop fabrication, job costing reveals which jobs make money, which lose money, and why. It's the difference between knowing your shop is busy and knowing your shop is profitable.
TL;DR
- Job costing tracks all costs (material, labor, machine, overhead) per individual job
- Reveals actual profit margins on each project - not just estimated margins
- Average countertop shop operates on 15-25% net margins; job costing protects those margins
- Key cost categories: stone material, labor hours, machine time, consumables, overhead allocation
- Identifies unprofitable job types, customers, or material categories
- Essential for accurate quoting - historical cost data improves future estimates
- Most shops underestimate labor and overhead costs, inflating perceived profits
- Software-tracked job costing is faster and more accurate than spreadsheet methods
Why Job Costing Matters in Fabrication
Many fabrication shop owners know their total monthly revenue and expenses but can't answer a simple question: "Did we make money on that kitchen job last week?"
Without job-level cost tracking, profits and losses get averaged together. A profitable granite kitchen subsidizes an unprofitable porcelain vanity, and the shop owner never knows the vanity lost money.
Over time, this blindness erodes margins. The shop takes on more unprofitable work (because it doesn't know it's unprofitable), underprices complex jobs, and overprices simple ones - losing bids where it should win and winning bids it should avoid.
Components of a Countertop Job Cost
1. Material Costs
| Component | How to Track |
|---|---|
| Slab material | Actual square footage used × cost per sq ft (including waste) |
| Sink/fixture (if supplied) | Purchase price |
| Adhesives, caulk, sealant | Allocated per job |
| Edge lamination material | Linear footage × cost |
| Backsplash material | Square footage × cost |
| Substrate (if needed) | Square footage × cost |
Common mistake: Tracking only the slab purchase price without accounting for waste. If you bought a $2,000 slab and used 85% of it, your material cost for the job is $2,000 - not $1,700. The 15% waste is part of that job's cost unless the remnant is sold.
2. Labor Costs
| Activity | Typical Time |
|---|---|
| Templating (including travel) | 1.5-3 hours |
| Template verification/programming | 0.5-1 hour |
| CNC cutting and profiling | 1-3 hours |
| Hand finishing and polishing | 0.5-2 hours |
| Quality inspection | 0.25-0.5 hours |
| Loading and transport | 0.5-1.5 hours |
| Installation | 2-4 hours |
| Cleanup | 0.25-0.5 hours |
Total labor per kitchen job: 7-16 hours across all activities
At an average loaded labor cost of $25-$45/hour (wages + benefits + payroll taxes), labor on a single kitchen ranges from $175 to $720.
3. Machine Time
CNC routers, bridge saws, and waterjets have hourly operating costs that include:
- Equipment depreciation
- Maintenance and repair reserves
- Consumables (diamond blades, bits, garnet)
- Electricity
- Water usage
A typical CNC router operating cost is $40-$80/hour. A bridge saw runs $20-$40/hour. These costs should be allocated to each job based on actual machine time used.
4. Overhead Allocation
Overhead costs don't vary by job but must be covered by job revenue:
- Rent/mortgage
- Insurance
- Office staff salaries
- Software subscriptions
- Vehicle expenses
- Marketing
- Utilities (beyond machine-specific)
The simplest allocation method: divide monthly overhead by the number of jobs to get a per-job overhead rate. More precise methods allocate based on job revenue share or labor hours.
Calculating Job Profitability
Example: Standard Granite Kitchen (35 sq ft)
| Cost Category | Amount |
|---|---|
| Slab material (full slab allocated) | $1,200 |
| Sink (customer supplied) | $0 |
| Consumables (adhesive, caulk, blade wear) | $85 |
| Labor (12 hours × $35/hr loaded) | $420 |
| Machine time (3 hrs CNC × $60/hr + 1 hr saw × $30/hr) | $210 |
| Overhead allocation | $350 |
| Total job cost | $2,265 |
| Job revenue (sold at $85/sq ft × 35 sq ft) | $2,975 |
| Gross profit | $710 |
| Profit margin | 23.9% |
This level of detail reveals where the money actually goes - and where it can be saved.
How Job Costing Improves Quoting
Historical job cost data is the most accurate foundation for future quotes:
- Material waste rates by stone type tell you how much extra to include in material estimates
- Actual labor hours by job complexity replace guesswork with data
- Machine time patterns reveal which jobs consume more CNC time than expected
- Overhead reality prevents underpricing that feels profitable but actually loses money
Shops that quote from actual cost data win more profitable jobs and avoid underbidding on complex work.
SlabWise's Quick Quote tool generates estimates in 3 minutes using the parameters that drive actual job costs, helping shops price accurately without the 20-minute manual quoting process.
Common Job Costing Mistakes
Mistake 1: Ignoring Waste
A 45 sq ft slab that yields 38 sq ft of installed countertop cost the shop the full slab price. Attributing only 38 sq ft worth of material to the job understates the true cost.
Mistake 2: Undervaluing Labor
Shops often track only direct fabrication labor and forget templating travel time, programming, quality inspection, and installation labor.
Mistake 3: Skipping Overhead
If overhead isn't allocated to individual jobs, every job looks more profitable than it actually is. A job showing 30% margin before overhead might be at 10% after overhead - or negative.
Mistake 4: Not Tracking Rework
When a piece needs to be recut or a template error requires a return trip, those costs must go against the original job. Otherwise, the remake cost gets buried in general expenses.
Frequently Asked Questions
What is job costing in countertop fabrication?
Job costing tracks all costs (material, labor, machine time, overhead) for each individual countertop project to determine actual profitability.
Why is job costing important for fabricators?
It reveals which jobs, materials, and customers are actually profitable - information that's invisible when you only track total monthly revenue and expenses.
What costs should be included in job costing?
Stone material, labor (all activities), machine time, consumables, overhead allocation, and any rework or remake costs.
How do you track material costs per job?
Record the full slab cost allocated to each job (including waste), plus consumables like adhesive, caulk, sealant, and any substrate or backsplash material.
What profit margins should countertop shops target?
Most healthy fabrication shops operate at 15-25% net margins. Job costing helps you identify which jobs fall below your target and why.
How does job costing improve quoting?
Historical cost data from completed jobs provides accurate inputs for future quotes - replacing estimates and guesses with real numbers.
Should rework costs be tracked per job?
Yes. A remake due to a template error or fabrication mistake is a cost of that specific job and should be attributed to it.
Can job costing be done in a spreadsheet?
For small shops, yes. But as job volume increases, spreadsheet tracking becomes time-consuming and error-prone. Dedicated software automates data capture and calculations.
How often should job costs be reviewed?
Monthly at minimum. Weekly reviews of completed jobs allow faster identification of cost trends and problem areas.
What is the most commonly underestimated cost in fabrication?
Labor. Many shops undercount the hours spent on templating travel, programming, inspection, and installation - leading to artificially high reported margins.
How does job costing relate to slab yield?
Low slab yield means more material cost per job. Tracking yield per job alongside job costs reveals the financial impact of poor nesting and material waste.
Should overhead be allocated per job?
Yes. Ignoring overhead makes every job look profitable on paper, even when the shop as a whole is losing money. Overhead must be distributed across all jobs.
Know Your Numbers, Grow Your Profits
Job costing turns gut feelings into data-driven decisions. SlabWise gives fabrication shops the tools to quote accurately, reduce material waste, and manage jobs from template to installation - so every project contributes to the bottom line.
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Sources
- ISFA - Business Management Standards for Fabrication Shops
- Stone World Magazine - "Job Costing Best Practices for Fabricators" (2024)
- Countertop Fabricators Alliance - Shop Profitability Benchmarks
- Kitchen & Bath Business - "Pricing and Costing in Countertop Fabrication" (2024)
- Small Business Administration - Job Costing Guide for Manufacturers
- Natural Stone Institute - Business Operations Resources