Construction Cost Breakdown

A construction cost breakdown is an analysis of every step of a construction project. It determines how much money was spent where and when, and is a major factor in ensuring that the project remains within its budgetary limits.

During the traditional bid process, the construction cost breakdown covers the amount it costs the contractor to do its portion of the project and pay its employees. The estimate covers the cost of items like concrete for the foundation, cables for electrical wiring, flooring, plumbing, carpentry and HVAC (heating, ventilation and air conditioning). In this case, construction cost calculator does not cover the cost of building or project design, as an architect has been hired by the property owner through a separate contract process.

In the design-build process, the construction cost breakdown is more involved. In this process, an architect and general contractor combine as a team and present a building or project design and construction contractor services in one proposal. The design-build process is used by those who believe an architect-contactor team with a past history of working together would be more efficient and, as a result, cheaper than an architect and contractor working together for the first time. In this case, however, the construction cost breakdown also includes architectural services.

The construction cost breakdown used as part of a construction manager at-risk (CM at-risk) project falls in between the two. The architect is hired separately from the general contractor, but the contractor is involved in the project from the pre-construction process all the way through completion. The estimate comes in the form of a guaranteed maximum price, which covers all services rendered from pre-construction through the building process.

Computer programs that estimate and monitor the construction cost breakdown have largely replaced human estimation, as they are able to complete the process more quickly and efficiently than a human accountant operating alone. There are a number of programs that can break down cost estimates into subsections, as well as delivering the overall total price.

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The estimated cost that is provided by the contractor may vary depending upon the nature of construction. In some cases the construction work may not get finished at the calculated period of time and in that case the labor cost will also increase.

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