Pre- and Post-Calculation
Pre- and Post-Calculation (Job Costing)
Pre-calculation estimates the cost and price of a job before it starts, post-calculation compares actual costs against that estimate afterwards.
Pre- and Post-Calculation: Not to be confused with
Pre- and post-calculation is NOT the same as the contribution margin. Pre-/post-calculation compares planned against actual costs, the contribution margin calculates from the result what remains from revenue after deducting variable costs.
Job costing assigns costs to a single job or project, instead of spreading them evenly across a period (Source 1). Pre-calculation serves as the basis for a quote and a budget, post-calculation shows after completion whether material, labour and machine costs came in as planned or where the original estimate was too optimistic.
Comparing the two matters most in project-driven work, for example on the Construction & Real Estate page and for Professional Services & Project Business, where every job has its own cost structure.
Related terms
Sources for Pre- and Post-Calculation
- Wikipedia, "Job costing" ↗