CONSTRUCTION INDUSTRY

World Class Constructions ltd

Presented by V2 : Akash Goyal Dipti Parmar Abhishek Dubey Nitish Mayawala Karthik Reddy

World class

Road Construction

Intra City

Inter City

 For example, Lets take construction of a Inter City for 100 KM which takes around 2 years to complete We shall see the different costs that are incurred in completing the project

Equipment Charges
Equipment Charges Dozer Dumper Vibrator Compresser Mixer Charge 6000/hr 1000/hr 3000/hr 2000/hr 1500/hr

Cost Incurred
10800000 1800000 5400000 3600000 2700000

Material/Other Variable Cost

Material Charges Labour Cement Metal Sand Charge 150/day 50 labor 400 /bag 1540/KM 1000/Metric ton 152.2/KM 2000/ton 77/KM

Cost Incurred
5400000 61600000 15220000 15400000

 Cements cost calculation It consists of 20% of the total layers present per 1KM. It requires around 1200 metric cubes per KM So cement proportion 240 MC 240 * 0.35 Tons = 77 tons = 77000 kg 77000/50 = 1540 bags Total bags required for 100 KM = 1540*100 = 154000 So total cost of cement required is 154000*400 = Rs 61600000/Similar calculation for all the materials and equipment

Overhead Expenses
Overheads Expenses Temporary offices Equipment charges Material Charges Administrative Salaries Utilities Electricity Vehicles Deisel charges Paints 6/unit 10 40/litre 1000/KM 50 Employees 4 offices

Total cost
10000000 24300000 92220000 24000000 7000000 2400000 5000000 288000 200000

Other Expenses
Expenses Basis

Total Cost
6000000 600000
3628800

Employment taxes Phone bills

Travel Expenses

No of Employees No of Employees and time for project No of Employees and No of vehicles Space occupied
No of Machines Length of road

Rent
Repairs Land Acquisitions

960000
2400000 960000

Food
Health/Medical Expenses Other Expenses

No of Employees
No of Employees No of Employees and time for project

3600000
3000000 8000000

Departments
Administrative Civil Department Electrical Dept Mechanical Dept Dept No of Employees Space Vehicles Used Temporary offices No of Machines 2000 sq ft 5 2 5 25 1000 Sq Ft 2 1 1 10 1000 Sq Ft 2 1 4 10 500 Sq Ft 1 1 0 5

COST ALLOCATION
Basis of Allocation Civil Electrical Department Dept 5000000 12150000 2000000 2430000 Mechanical Dept 2000000 9720000 Administrativ Total Cost e Dept 1000000 10000000 0 24300000

Temporary offices
Equipment charges

No of Employees
No of Machines

Administrativ No of e Salaries Employees 12000000 4800000 4800000 2400000 24000000 No of Utilities Employees 3500000 1400000 1400000 700000 7000000 No of Employees & No of Electricity* Machines 1666666.667 133333.3333 533333.3333 66666.66667 2400000 Vehicles Deisel charges* Vehicles Used 1500000 600000 600000 300000 No of Employees & Vehicles 211764.7059 33882.35294 33882.35294 8470.588235 3000000

288000

Cost Allocation
Civil Electrical Department Dept Employment taxes
No of Employees No of Employees and time for project No of Employees Space occupied No of Machines

Mechanical Dept 1200000

Administrativ Total Cost e Dept 600000 6000000

3000000

1200000

Phone bills Travel Expenses*

Rent Repairs Industrial Machinery Land Acquisitions

300000

120000

120000

60000

600000
3628800 960000

2668235.294 426917.6471 426917.6471 106729.4118 426666.6667 213333.3333 213333.3333 106666.6667

Length of road No of Employees

1200000 0

240000 0

960000 0

0 960000

2400000 960000

Food Health/Medic al Expenses

No of Employees
Space occupied

1800000
1500000

720000
600000

720000
600000

360000
300000

3600000
3000000

ABC Costing for Equipment charges

First 50 KM Equipment/Mat erial Charges Dozer Dumper Vibrator Compresser Mixer 6000/hr 1000/hr 3000/hr 2000/hr 1500/hr Second 50 KM First 50 KM Second 50 KM No of Hrs used No of Hrs used Costs incurred Costs incurred 108 112 100 108 95 72 68 80 72 85 6480000 1120000 3000000 2160000 1425000 4320000 680000 2400000 1440000 1275000

ABC Costing for Material charges

Equipment/Mat erial Charges First 50 KM Proportion used Second 50 KM First 50 KM Second 50 KM Proportion used Costs incurred Costs incurred

Labor
Cement Metal Sand

150/day
400 /bag 1000/Metric ton 2000/ton

432
924 91.32 46.2

288
616 60.88 30.8 Total Cost

3240000
36960000 9132000 9240000 72757000 58260000

2160000
24640000 6088000 6160000 49163000 58260000 9097000

Difference

-14497000

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