CONSTRUCTION

COST
 Material
 Wastages
 Pricing
 Labour Productivity
 Labour Cost
 Equipment Cost

TOPICS
 To account for construction wastage, various percentage added
in the computed quantities.
 Concrete
 Waste ranges from 5 percent for footings, columns, and beams to 8
percent for slabs.
 Masonry = 5%
 Mortar = 40%
 Wood work = 25%

WASTAGE
 Reinforcement
 Pre cut to cut/bent on site 1-10%
 Wire mesh Waste averages about 5%
 Reinforcement bars
 For Slab 8%
 Other member 10% (including laps)

WASTAGE
 Example:
For a building project the quantity take results are given below:
Number of bricks = 8000 no.
Steel for slab = 1500 lbs
Steel for lintels and shades = 800 lbs
Considering wastage how much steel and brick should be procured?
Solution:
Wastage in case of masonry = 5%
So number of bricks wasted = 5/100 * 8000 = 400 bricks
So total bricks to be procured = 8000 + 400 = 8400 no.

WASTAGE
Wastage for slab 8%
Other members = 10% (including laps)
Additional steel considering wastage for slab = 8/100 * 1500 = 120 lbs
Total steel required for slab = 1500 + 120 lbs = 1620 lbs
Additional steel for lintels and shades = 10/100 * 800 = 80 lbs
Total steel required for lintels and shades = 800 + 80 = 880 lbs
Total steel to be procured = 1620 lbs + 880 lbs = 2500 lbs

WASTAGE
 COST COMPONENTS
 Components of Costs Specific to a Construction Project.

Bid Price

Markup
Total cost
Cost

Direct Cost Indirect Cost Profit Contingency

Material Labour Project Overhead

Common plant Allowance General
and equipment for risks overhead

Common
Equipment
workmen

Total Cost= Direct Cost+ Indirect Cost

 Productivity

► A measure of the efficiency of a person, machine, factory, system, etc., in

converting inputs into useful outputs.
► Productivity is an economic measure of output per unit of input. Inputs
include labor and capital.
► Productivity is computed by dividing average output per period by the
total costs incurred or resources (capital, energy, material, personnel)
consumed in that period.
► Productivity is a critical determinant of cost efficiency.
 Estimating labor requires determining the number of labor hours to do a specific task and
then multiplying it with wage rate.
 A labor hour is defined as one worker working for one hour. Determining the labor hours
requires knowing the quantity of work to be placed and the productivity rate for the
specific crew that will perform the work.
 The crew is an aggregation of construction trades working on a specific task.
 The productivity rate is often expressed as a number of labor hours per unit of work,
although it may also be expressed as the quantity of work performed by a crew during a
standard eight-hour day.
 Productivity rates can come from a number of sources, but the most reliable source is
historical data. The advantage of historical data is that it reflects how a particular
company’s personnel perform the tasks. The historical productivity rate is determined by
dividing the total number of labor hours to complete a task by the actual quantity of work
performed.
Productivity Rate = Labour Hour / Quantity
OR
Labour Hour = Quantity Takeoff * Productivity Rate

LABOUR PRODUCTIVITY
Example 1:
Calculate labour cost for following item of work.
Type of work—8'' × 8'' × 16'' Concrete Masonry Units (CMUs)
Quantity of work—1,700 square feet
Labor wage— Rs 600 per hour
Productivity rate — 0.1 labour hour per sf
Solution:
First calculate the number of labour hours required to perform the work.
Labour hours = Productivity rate * Quantity of work
Labour hours = 0.1 * 1700 = 170 labour hours
Total labour cost = Labour hours * Wage rate per hour
Total labour cost = 170 * 600 = Rs. 102,000

LABOUR PRODUCTIVITY
 The productivity rate that is used, if derived from historical data, is for
the average or standard conditions for the projects used in calculating the
historical production rate.
 On many occasions, the project that is being bid deviates from these
standard conditions. Therefore, the number of labor hours needs to be
modified to take into consideration how the project that is being bid
deviates from the standard condition. This is done by using a productivity
factor.

Adjusted Labor Hours = Labour Hours * Productivity Factor

 When the conditions slow the progress of the work, a productivity factor
greater than one is used, thus increasing the number of labor hours to
complete a unit of work. When the conditions increase the speed at which
the work progresses, a productivity factor less than one is used, thus
decreasing the number of labor hours to complete a unit of work.

LABOUR PRODUCTIVITY
 Following variables must be considered when determining the
productivity factor.
 Availability and Productivity of Workers
 Climatic Conditions
 Working Conditions
 Other Considerations

PRODUCTIVITY FACTOR
Example 2:
Calculate labour cost for placing 1,000sf of concrete masonry units.
Historical productivity rate—0.1 labor hours per sf
Productivity factor—1.1
Crew—three masons and two helpers
Mason wage rate —Rs 800 per hour
Helper wage rate — Rs 350 per hour
Solution:
Labour hours = Productivity rate * Quantity of work
Labor hours = 1,000 sf * 0.10 labor hours per sf = 100 labor hours
Adjusted Labor Hours = Labour hours * Productivity Factor
Adjusted labor hours = 100 labor hours * 1.1 = 110 labor hours

LABOUR PRODUCTIVITY
Sixty percent (3/5) of the hours will be performed by masons and 40 percent (2/5) will
be performed by their helpers.
Mason labor hours = 0.60 * 110 labor hours = 66 labor hours
Mason helper labor hours = 0.40 * 110 labor hours = 44 labor hours
Labour cost = Labour hours * Wage rate per hour
Mason cost = 66 * 800 = Rs. 52,800
Helper cost = 44 * 350 = Rs. 15,400
Total cost = 52,800 + 15400 = Rs. 68,200

LABOUR PRODUCTIVITY
Example 3:
Find the labor cost for placing 42 cy of concrete.
27 cf =1 cy
Productivity rate = 0 .4 labor hours / cy
Wage rate = $13 .50 / hour
Solution:
Labour hours = Productivity rate * Quantity of work
Labor hours = 42 cy * 0 .4 labor hours / cy = 16.8 labor hours
Labour cost = Labour hours * Wage rate per hour
Labour cost = 16.8 labor hours * $13 .50 / hour = $ 226.80

LABOUR PRODUCTIVITY
Example 4:
Determine the labor cost for placing the 4, 298 pound reinforcing steel for the
continuous footings.
1 ton = 2000 pounds
Productivity rate = 15 labor hours / ton
Wage rate = $ 14.25/ hour
Solution:
Quantity in tons = 4,298 pounds/ 2000 pounds / ton = 2.149 tons
Labour hours = Productivity rate * Quantity of work
Labor hours = 2.149 tons * 15 labor hours / ton = 32.235 labor hours
Labour cost = Labour hours * Wage rate per hour
Labour cost = 32.235 labor hours * $ 14.25/ hour = $ 460

LABOUR PRODUCTIVITY
Example 5:
Calculate labour cost if one labour is hired for excavation.

Quantity of material to be excavated = 1023.88 cu. ft.

Output of one labour working 8 hrs (1 day) = 75 cu. ft.

Wage rate = Rs. 650 per day

Solution:
Productivity Rate = Labour Hour / Quantity

Productivity rate = 1 day/ 75 cu ft = 0.0134 day / cu ft

Labour hours = Productivity rate * Quantity of work
Labour hours = 0.0134 day * cu ft *1023.88 cu.ft = 13.65 days
Labour cost = Labour hours * Wage rate per hour
Labour cost = 13.65 days* 650 Rs./day = Rs. 8,873

LABOUR PRODUCTIVITY
Example 6:

Calculate labour cost if one labour is hired for excavation.

Plot Area = 28’ x 28‘ = 784 Sq. ft.
Depth of clearance = 3 in.
Productivity rate = 0.1 hour / cu. ft
Wage rate = Rs. 125 per hour

Solution (b):
Quantity = 784 * (3/12) = 784 * 0.25 = 196 cu. ft.
Labour hours = Productivity rate * Quantity of work
Labour hours =0.1 hous / cu. ft * 196 cu. ft. = 19.6 hours
Labour cost = Labour hours * Wage rate per hour
Labour cost = 19.6 hours * Rs. 125 / hour = Rs. 2450

LABOUR PRODUCTIVITY
Equipment cost = Equipment hours * Equipment rate/
cost per hour
 Example 1:
For a housing project the quantity to be excavated is 437cy. Using the following
equipment calculated the total equipment cost.
Required equipment: Backhoe with 1-cy bucket 27 cf =1 cy
Mobilization: 2 hours
Rate of work for backhoe: 55 cy per hour
Equipment cost: $16.75 per hour
Operator cost: $19.75 per hour

Solution:
Equipment hours = 407 bcy / 55 bcy per hour = 7.4 hours
Total hours = 7.4 equipment hours + 2 hours for mobilization = 9.4 hours
Equipment cost = 9.4 hours * $16.75 per hour = $158
Labor cost = 9.4 hours * $19.75 per hour = $186
Total cost = $158 + $186 = $ 344

EQUIPMENT
 Example 2:
Quantity to be backfilled : 153 cy 27 cf =1 cy
Equipment: Dozer (120 hp) at $16.85 per hour
Dozer work rate: 100 cy per hour (Figure 9.26)
Operator: $18.30 per hour
Laborer: $11.50 per hour
Mobilization: 1.5 hours

Solution:
Backfill time (hours) = 153 cf / 100 cy per hour = 1.5 hours
Total hours = 1.5 hours + 1.5 mobilization hours = 3 hours
Equipment cost = 3 hours * $16.85 per hour = $50.55
Operator cost = 3 hours * $18.30 per hour = $54.90
Laborer cost = 3 hours * $11.50 per hour = $34.50
Total cost = $54.90 + $34.50 + $50.55 = $ 139.95

EQUIPMENT
 Example 3:
Calculate equipment cost for clearance.
Plot Area = 28’ x 28‘ = 784 Sq. ft.
Depth of clearance = 3 in.
Efficiency of Dozer = 437 cu. ft. / hr.
Rate = Rs 4000/ hr. (if more than 12,000 cu. ft.)
Rate = Rs 8000/ hr. (if less than 12,000 cu. ft.)
Operator cost = 550 per hour

Solution:
Quantity = 784 * (3/12) = 784 * 0.25 = 196 cu. ft
Equipment hours = 196 cu. ft / 437 cu. ft / hr = 0.45 hours
Equipment cost = 0.45 hours * 8000 per hour = Rs. 3600
Operator cost = 0.45 hours * 550 per hour = Rs. 248
Total cost = Rs. 3600+ Rs. 248 = Rs. 3848

EQUIPMENT