Answered: What are the five main items of the…

Fundamentals Of Construction Estimating

4th Edition

ISBN:9781337399395

Author:Pratt, David J.

Publisher:Pratt, David J.

Chapter14: Pricing General Expenses

Section: Chapter Questions

Problem 1RQ

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Question

What are the five main items of the cost of a project?

Expert Solution

Step 1

- Different categories of cost of a project are,

1- Direct cost

- It includes cost related to employees salary, legal documentation of structural building, licences.

2- Indirect cost

- It includes cost related to providing essentials like potable water, sanitation, lightning, electricity, office rent.

3- Fixed cost

- The fixed cost does not depend on duration of project. it includes cost related to consultancy and advertising.

4- Variable cost

- The variable cost depend on duration of project, It include cost related to Equipment and machines rental amount.

5- Sunk cost

- The sunk cost cannot be recovered and it is spent in any form provided above.

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