How to Fix Up Rate Per Unit of Item in Construction:

Fixing up the rate per unit of an item in construction is an essential aspect of cost estimation and budgeting. The rate per unit refers to the cost of completing a specific unit of work, such as per cubic meter of concrete or per square meter of flooring. This calculation is crucial for contractors, quantity surveyors, and project managers to ensure that they stay within budget and provide accurate project bids.

Steps to Fix Up Rate Per Unit:

1. Identify the Item: Begin by identifying the specific item or task for which you need to calculate the rate, such as concrete pouring, brick laying, or tiling.

2. Break Down the Components:

   • Material Costs: Determine the cost of the materials required for the item. This includes the quantity of materials and their respective costs (e.g., cement, aggregates, steel).
   • Labor Costs: Calculate the cost of labor involved in completing the item. This can be determined by the number of labor hours required and the hourly wage rate for workers.
   • Equipment Costs: Consider the cost of any equipment or machinery required, including operating hours and fuel costs.
   • Overheads: Include indirect costs such as site management, administration, and any general expenses allocated to the task.

3. Calculate the Quantity:

   • Measure the quantity of work completed per unit, such as square meters, cubic meters, or linear meters. This helps in ensuring that the rate is calculated for a standardized unit of work.

4. Apply the Formula: The general formula to calculate the rate per unit is:

   Rate per Unit = (Material Cost + Labor Cost + Equipment Cost + Overheads) / Quantity

   This gives you the unit rate that can be used for pricing and billing.

5. Check Market Prices: Compare the rate you've calculated with current market rates for similar work. Ensure that your calculated rate is competitive and reflects current market conditions.

6. Consider Contingencies: Always include a small margin for unforeseen expenses, such as price fluctuations in materials or labor shortages.

Example:

If you're calculating the rate per cubic meter for pouring concrete:

• Materials: Cement, aggregates, water – $150 per cubic meter.
• Labor: $100 for 10 labor hours – $10 per hour, total of $100.
• Equipment: Concrete mixer rental for 10 hours – $50.
• Overhead: $20.

Rate per cubic meter = ($150 + $100 + $50 + $20) / 1 = $320 per cubic meter.

Wed Jan 29, 2025