SME
Construction Engineering
Cost estimating
Use this for “Placing 85 m³ of concrete takes material at $165/m³ and 1.6 labor-hours per m³ at $42/h. With a 15% markup, what is the bid?”
Chart
Material: $14,025
Labor: $5,712
This is an example. Type your own values to start a new problem.
$
M
=
Q (m³)
×
uₘ ($/m³)
$
Lc
=
Q (m³)
×
p (labor-h/m³)
×
w ($/h)
$
B
=
$
D
×
(1
+
m (%)
)
Q is the quantity of work, uₘ its material cost per m³, p the labor-hours per m³ and w the wage; m is the markup on the direct cost D.
Formulas
M
=
Q
×
uₘ
14,025 = 85 × 165
Lc
=
Q
×
p
×
w
5,712 = 85 × 1.6 × 42
D
=
M
+
Lc
19,737 = 14,025 + 5,712
B
=
D
×
(1
+
m
100
)
22,698
=
19,737
×
(1
+
15
100
)
Assumptions
•
Unit costs and productivity come from the contractor’s records or a cost guide.
•
Labor-hours per m³ already allow for the crew size.
•
Equipment and indirect costs sit in the markup here.
Step-by-step
WE KNOW
Q = 85 m³, uₘ = 165 $/m³, p = 1.6 labor-h/m³, w = 42 $/h, m = 15%
FIND
material cost (M), labor cost (Lc), direct cost (D), bid price (B)
Step 1 · Find material cost (M)
Use M = Q × uₘ
Each cubic metre takes its material cost, so multiply by the quantity.
M
=
85
×
165
M
=
$14,025
Step 2 · Find labor cost (Lc)
Use Lc = Q × p × w
The quantity times the labor-hours per cubic metre is the hours worked; each hour costs the wage.
Lc = 85 × 1.6 × 42
Lc = 136 × 42
Lc = $5,712
Step 3 · Find direct cost (D)
Use D = M + Lc
The direct cost of the work is its material plus its labor.
D
=
14,025
+
5,712
D
=
$19,737
Step 4 · Find bid price (B)
Use B = D × (1 + m ÷ 100)
The
markup
adds
m
%
of
the
direct
cost
for
overhead
and
profit.
B
=
19,737
×
(1
+
15
100
)
B
=
19,737
×
(1
+
0.15)
B
=
19,737
×
1.15
B
=
$22,698
Check
Put the numbers back in. Both sides should match.
14,025 = 85 × 165 ✓
5,712 = 85 × 1.6 × 42 ✓
19,737 = 14,025 + 5,712 ✓
22,698
=
19,737
×
(1
+
15
100
)
✓
Topic check
See what you know: 5 questions on this topic
New questions each time. Pass to mark it complete.
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