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    Types of Costs in Construction

    Uploaded by

    Sajid Khan

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Types of Costs in Construction

    Uploaded by

    Sajid Khan
    4 views19 pages

    Original Title

    Types of Costs in construction

    Copyright

    © © All Rights Reserved

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    PDF, TXT or read online from Scribd

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    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    4 views19 pages

    Types of Costs in Construction

    Uploaded by

    Sajid Khan

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 19

    IN CONSTRUCTION

    Types of
    Costs CONSTRUCTION CONTRACTS MANGEMENT
    BY

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    Definition:

    Costs that do not change with the level of


    output or activity in a construction
    project.

    1. Examples:

    FIXED COSTS
    Rent, salaries, insurance, depreciation.

    arithi
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    SLIDE #1
    Definition:

    Costs that vary directly with the level


    of construction activity.

    2. Examples:
    VARIABLE COSTS
    Raw materials, direct labor, fuel for
    machineries.

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    SLIDE #2
    Definition:

    Costs that have both fixed and variable


    3. components.
    SEMI-
    VARIABLE Examples:

    COSTS (MIXED
    Utility bills for the site office (fixed
    COSTS): base charge plus variable usage),
    equipment maintenance.

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    SLIDE #3
    Definition:

    Costs that can be directly attributed to


    a specific construction project.
    4.
    DIRECT Examples:
    COSTS:
    Direct labor, materials specific to the
    project, subcontractor fees

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    SLIDE #4
    Definition:

    Costs not directly traceable to a


    specific project but necessary for
    5. overall operations.

    INDIRECT Examples:
    COSTS
    Administrative expenses, site security,
    general utilities.

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    SLIDE #5
    Definition:

    Costs required for the day-to-day


    operation of the construction business.
    6.
    Examples:
    OPERATING
    COSTS: Site office expenses, staff salaries,
    equipment rentals.

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    SLIDE #6
    Definition:

    Costs not related to the core


    construction activities.
    7.
    NON- Examples:
    OPERATING
    COSTS Interest on loans, legal fees,
    depreciation of office equipment.

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    SLIDE #7
    Definition:

    Costs that have already been incurred


    and cannot be recovered.

    Examples:
    8.
    SUNK COSTS Initial design fees, preliminary surveys,
    initial permit costs, initial setup costs.

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    SLIDE #8
    Definition:

    The potential benefits lost when


    choosing one construction project over
    another.

    9. Examples:
    OPPORTUNITY
    Foregone profit from not pursuing an
    COSTS:
    alternative project, rental income lost
    from using owned property as a

    rithi
    construction sit

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    SLIDE #9
    Definition:

    Costs that can be influenced or


    regulated by management.

    10.
    Examples:
    CONTROLLA
    BLE COSTS: Overtime labor costs, discretionary
    purchases of materials, marketing
    expenses.

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    SLIDE #10
    Definition:

    Costs that cannot be changed or


    11. influenced by management in the short
    UN- term.
    CONTROLLA
    BLE COSTS: Examples:

    Depreciation of equipment, long-term


    lease payments for equipment.

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    SLIDE #11
    Definition:

    The cost of constructing one additional


    unit or structure

    12.
    Examples:
    MARGINAL
    COSTS : Additional materials and labor for one
    more unit of housing or one extra floor
    in a building..

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    SLIDE #12
    Definition:
    13.
    Costs that do not involve actual cash
    IMPUTED
    outlay but represent the value of
    COSTS resources used.
    (IMPLICIT
    COSTS): Examples:

    Value of company-owned land used for


    a project, owner's time and expertise

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    SLIDE #13
    Definition:

    Costs that involve direct monetary


    payment.
    14.
    Examples:
    EXPLICIT
    COSTS: Payments to subcontractors, purchase
    of materials, utility bills

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    SLIDE #14
    Definition:

    Additional costs associated with a


    15. particular construction decision.
    INCREMENTA
    L COSTS: Examples:

    Extra costs for expedited shipping of


    materials, additional expenses for

    arithi
    design changes.

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    SLIDE #15
    Definition:

    Costs that can be eliminated if a


    particular decision is made.

    16.
    Examples:
    AVOIDABLE
    COSTS: Costs of a canceled project phase,
    variable costs saved by reducing
    project scope.

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    SLIDE #16
    Definition:

    Long-term costs that cannot be easily


    changed or avoided.
    17.
    COMMITTED Examples:
    COSTS
    Lease payments for equipment,
    salaries for key staff under contract.

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    SLIDE #17
    THANKS FOR
    READING
    CONSTRUCTION CONTRACTS MANGEMENT
    BY
    FOLLOW ME FOR MORE

    arithi
    lamp
    I
    Ilamparithi BoologaSundaraVijayan

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