A contractor's job came in with actual costs of $88,000 against an estimate of $80,000, while the contract price stayed at $95,000. The MOST useful lesson from this job cost comparison is that:
Explanation
Actual cost of $88,000 against an $80,000 estimate is an $8,000 overrun, and the useful question is why the estimate missed — labour hours, material prices, a scope item left out — so the next bid is built on better numbers. The job still earned $7,000, so the price was not too high; a higher price might have lost the job altogether. A lower estimate would have widened the gap rather than closed it. And abandoning job costing removes the only record that made the overrun visible.
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