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What are the major elements for costing a project and what will be the percentage of profit to be incorporated ?

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Question added by Anil Kumar , MANAGER – FINANCE & OPERATIONS , ICT
Date Posted: 2015/03/15
Mohammed Hussain Shah
by Mohammed Hussain Shah , Finance Manager , Al-Naba Contracting Co. Ltd

The major elements for costing a project could be:-

1) Material costs and further drilled down to major classes of materials like electrical, mechanical etc,

2) Manpower costs further divided into direct, indirect, 

3) Equipment costs by way of rental charges,

4) Sub-contract costs if you sub-contract some parts of the project,

5) Project direct expenses like engineering, surveying, mobilization, demobilization, cleaning etc,

6) On-site overheads like administrative expenses at site ,

7) Off-site overheads that is , a part of the G&A expenses allocated to a project,

8) Contingency reserves 

The profit will depend upon many factors like your company policy, order book, backlog carried over , competition , duration of the project etc 

 

Hamid Mohammed Alamin
by Hamid Mohammed Alamin , مراجع حسابت , ميناء عصب

major elements of costs in project: labour + materials costs+ overhead costs and percentage of profit will depend on the company policy but margin costs should not be more than65% of the estimated profit.

 

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