Rate Analysis
Obtaining the cost of unit amount planning we
To obtain the rate of an item we require
following:
- Cost of labor
- Cost of materials
- Cost of plant & tools
- Overhead cost
- Profit
Purpose of rate analysis
- To determine the current rate of an item
- Examine the viability of rates offered by contractors
- Calculate the quantity of materials and labor strength required for project planning
- Fix up labor contract rates
Factors affecting the rate analysis
·
Specification of the item
which indicates quality proportion
·
Present rate of materials based on their work
·
Daily wages of different
categories of laborer
·
Range of lead and lift
·
Percentage charge of
overheads
·
Range of profit and
availability of water
Cost of material
·
To obtain the cost of
material first specification is studied.
·
Quantity of material
required is calculated and multiplied by the cost to obtain the unit cost.
·
Cost includes
transportation, tax, insurance, as well as profit.
·
A quantity surveyor has
to do his market and area survey before calculating the unit cost of the
material.
Cost of labor
·
Productivity of the labor
is an important aspect in calculation of labor cost.
·
Productivity depends upon
the type of work, nature of work and time schedule of the work.
Cost of equipment
·
For equipment it is not possible to calculate the cost but the
equipment charge can be added as overhead.
Overhead cost
·
During the time of construction the firm has to maintain an
office or collection of all equipments. This is usually taken as 2-5% of unit
rate.
Part
of the overhead is thus directly related to the construction of an item of
work. All such expenses include
·
Repair and depreciation
of tool and plants
·
Supervision charges
·
Site office and go downs
·
Lighting arrangements
·
Welfare of labour
·
Safety scheme
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