Estimate Cost of Foundation Laying - Essay Sample

The wage per hour for foundation laying is given as $18.86 Source https://www.bls.gov/oes/2018/may/oes472061.htm

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Cost of a Cubic Yard Reinforced Concrete

The cost of a cubic yard of reinforced concrete is $1,035.47 source https://www.bls.gov/opub/btn/volume-6/arlington-memorial-bridge-spans-the-decades-as-a-study-in-long-term-price-change.htm#_edn3

Labor Cost Estimation

For this particular foundation-laying, the number of workers is eight working at five days per week for 10 hours a day, and the total duration taken is three weeks. Thus the total cost of labor is (8 x 5x (10 x 18.86)) x 3 which equals $22,632. Thus the total estimate for pouring and finishing the concrete foundation is $ 22,632.

Estimation of the Total Cost of Materials

The total cost of materials is given by (1,035.47 x 400) which equals $414, 188

Effects of Overhead Charges on Labor and Material Estimation

The overhead charges result in an overall increase in the cost of both labor and construction materials. The construction work requires a significant relationship among other independent contractors, rental used to store equipment, frequent change in location, and labor costs (Scevik et al., 2017). As such, the overhead costs in construction can be classified under two main categories indirect and direct.

The indirect overhead charges category includes those fees that the contract is expected to pay, although they are not specific to any work during the construction. Consequently, if indirect charges continuously occur during the construction, the labor and cost of materials estimations will be significantly affected since more finance will be needed to incur the increasing indirect overhead charges (Labor, 2017). Contrastingly, the direct overhead charges are those charges that are channeled directly to the project. The direct overhead charges equally lead to a significant impact on both the labor and cost of materials estimations.

Various indirect overhead charges can be incurred during the construction that can affect both the labor and cost of materials estimation. The contractor's notable indirect overhead charges are likely to include the benefits and salaries of personnel and employees, such as the administrative employees, bookkeepers, and other executive employees who their work is not done on the actual site (Scevik et al., 2017. Consequently, the actual labor and cost of materials estimation are affected since a lot of resources will be used to carter for individuals who do not directly participate in the laying of the foundation.

Furthermore, the office spaces used by various executives personnel during the construction of the foundation result in numerous costs, particularly in terms of rent, supplies, and utilities contribute to the indirect overhead charges which in turn affects both the labor and cost of materials estimation (Scevik et al., 2017. The physical properties used during the construction, such as vehicles and other related costs, also contribute to the category's indirect overhead charges. Miscellaneous expenses such as advertising, marketing, and traveling costs impact the estimations of labor and cost of materials since the original cost of labor entailed only the workers involved in lying on the foundation. Existences of the miscellaneous expenses divert a significant amount of the construction resources leading to adjustment on the labor and material costs estimation.

The direct overhead charges are mostly associated with the structures and space, including the office of the architect, temporary offices, and leased office space. The category also includes specific salaries linked to the project like the engineers’ salary, and foremen’s salary (Labor, 2017). The cost of the equipment like bulldozers also contributes to the overhead charges. Collectively, the different overhead charges contribute to an increase in the overall cost of materials and labor.

How an Increase in the Cost of Steel Impact the Budget

Steel is a critical component of the reinforced concrete. As such, cost consideration is fundamental when selecting the appropriate frame material, a process that is done during the design procedure (Qui et al., 2020). The prices are also estimated during the structural design process. In an event where the prices of the steel inflate above the expected normal, the cost of both labor and materials will be affected as there will be adjustments leading to an increase in the initial allocated budget.

The foundation of the warehouse will require a lot of steel to construct. Consequently, if there is an increase in the price of steel, a large quantity of steel will cost almost double the expected price (Qui et al., 2020). The labor cost will be cut considerably to allow for more allocation of finance to facilitate the steel purchase.

Numerous factors are likely to increase the cost of steel. However, the most critical determinant is the supply and demand trend. The greater the demand, the lower the supply of steel hence high prices (Labor, 2017). Thus, steel should be purchased when the prices are relatively low early enough before the actual construction begins to allow for adequate time to adjust the budget estimations where necessary to ensure that the labor and cost of materials estimations are not overstretched.

Impact of Hurricane on the Overall Schedule of the Construction Budget

A natural disaster like a hurricane will lead to an overall increase in the warehouse's construction budget. This is primarily linked to the immediate increase in the cost of both essential services and goods after the hurricane (Pinelli et al., 2018). For instance, after a hurricane, there will be a considerable lack of enough workers to carry on with the project. The construction workers are very critical, particularly in ensuring the success of the project. However, after the hurricane, there may be a likelihood that most of them may be displaced, resulting in scarce labor, which will be on high demand hence the high cost of labor, affecting the budget.

According to the bureau of labor statistics, there were 237 000 available construction jobs before the most recent hurricane (Labor, 2017). After the hurricane, the job vacancies grew significantly, implying that there are inadequate construction workers to fill the existing vacancies. In turn, the overall budget of the construction of the warehouse will need significant adjustment to meet the increasing cost of construction labor due to the low ratio of workers to the high number of available jobs.

The overall budget of the construction of the warehouse will also need adjustment to meet the rising costs of supply. A lot of reconstruction is to be done after a hurricane occurrence; this will lead to increased demand in the building materials like steel and concrete (Pinelli et al., 2018). The inflation in prices of the building materials necessarily means that there will be an increase in the initial budget of the warehouse construction.

Conclusion

In conclusion, the construction of the foundation is a critical stage in realizing the success of the warehouse project. However, overhead charges should be keenly taken care of to avoid an unnecessary increase in the budget. The project manager should also consider critical factors like the cost of steel and natural calamities like hurricanes when drafting the budget.

References

Labor, U. D. (2017). US Bureau of Labor Statistics. https://heinonline.org/

Pinelli, J. P., Roueche, D., Kijewski-Correa, T., Plaza, F., Prevatt, D., Zisis, I., ... & Rasouli, A. (2018). Overview of damage observed in regional construction during the passage of Hurricane Irma over the state of Florida. Proc., ASCE Forensic, 18. https://ascelibrary.org/

Qi, Y., Li, H., Liu, Y., Feng, S., Li, Y., & Guo, S. (2020). Granger causality transmission mechanism of steel product prices under multiple scales—The industrial chain perspective. Resources Policy, 67, 101674. https://www.sciencedirect.com/

Scevik, V., & Vitkova, E. (2017). OPTIMIZATION OF OVERHEAD COSTS OF A CONSTRUCTION CONTRACT. Economic and Social Development: Book of Proceedings, 515-523. https://www.researchgate.net/