COSTING

FOR
RESOURCES

MATERIAL PRICING

A lump sum or unit price will be obtained

from the material supplier.
The estimator will need to confirm the
required material quantity.
Factors that affect the price of materials:
Quantity discounts
Term of payments and discounts
Time

Taxes

Government regulations

Storage
Creditability of the buyer

Handling

Delivery

LABOUR PRICING

The estimated price for labour is

derived
from
the
quantity
of
material, anticipated productivity, and
labour wage rates.
The quantity of material and wage
rates
are
relatively
easy
to
determine.
However, the anticipated production
rate is much more difficult to
develop.

LABOUR PRICING (CONTD)

The quantity of material used in labour
pricing is determined during the quantity
take-off phase.
The unit of measure is usually the same
as that used for the material pricing.
Wage rate
The amount that is paid directly to the
individual for employment is the wage
rate.
Indirect costs are also paid by the
company on behalf of the employee.

LABOUR PRICING (CONTD)

Productivity

The production rate is basic to the

determination of the labour cost. It
asks the question, How many worker
hours are required to complete each
item of work?

The estimator will need to determine

optimum crew size and anticipated
productivity.

LABOUR PRICING (CONTD)

Productivity (contd)
The estimator should consider the following
information about the activity:
i. Project schedule
ii. Anticipated weather conditions
iii. Working conditions
iv. Project variations
v. Equipment usage
vi. The effect of learning curve

EQUIPMENT COST

Equipment costs for civil projects, such

as roads and rams, can be substantial,
but less significant for building projects.

EQUIPMENT COST (CONTD)

Heavy construction equipment
Example: backhoe,
tractor, etc.

bulldozer,

road

grader,

The estimator will need to determine what

equipment is required and how long it will be
needed. Most equipment costs are calculated
by knowing the production rate of each piece,
how long it will be operating, and the hourly
cost.

EQUIPMENT COST (CONTD)

Heavy construction equipment
(contd)
The estimator needs to know the followings to
estimate the total cost of the heavy
equipment:
1.
Total amount of work to be performed
2. Hourly cost to own and operate or rent
(lease) the equipment
3. Production rate of the equipment

EQUIPMENT COST (CONTD)

Heavy construction equipment
(contd)
The production rate of a heavy equipment
depends on:
1.
Type and size of equipment
2. Efficiency of equipment
3. Job site conditions
4. Management conditions
5. Type of job to be performed
6. Experience of operator

EQUIPMENT COST (CONTD)

Small equipment
Example: concrete mixer, concrete vibrator.
This type of equipment is normally owned by
the construction company.
The initial cost of the equipment, expected
life of the equipment, and consumables need
to be considered when establishing the rate.

REFERENCES
D.

Schuette, Stephen. Building Construction

Estimating. McGraw Hill. Chapter 4.