Question

You and your team are awarded a 1 year contract to supply/deliver, construct, test and commissioning of a 20 units 2-storey shophouse near your hometown. Construct a financial plan to illustrate your preparation of material and manpower delivery plan comprehensively.

Assuming the total budget will be $20,000,000

Answer 1

As per the construction practice any construction of building /shop house , 60% of the estimated cost would be material and remaining 40% shall be considered as labour cost . In this instance total budgeted cost would be $ 20,000,000/- out of which material cost shall be considered as 60% of the total budget i.e $ 12,000,000/- and remaining 40% i.e $ 80,00,000/- can be considered as man power cost( Labour ).

Unit wise bifurcation of the total budgeted cost: ( Total Budgeted Cost is $ 20,000,000/-)

Further it may be comprehensively divided the total budgeted cost of $ 20,000,000/- in 20 units

Total units is 20           Total budgeted cost is $ 20,000,000/-

Per unit Budgeted Cost is $ 10,00,000

Per unit material Cost $ 6,00,000/- per Unit labour Cost $ 4,00,000/-

2 Storey shop wise bifurcation of the total budgeted cost: ( Total Budgeted Cost is $ 20,000,000/-)

One storey shop Budgeted cost is $ 10,000,000($20,000,000/2)

Material cost per one storey shop is $60, 00,000(60% of the budgeted cost)

Labour cost per storey shop is 40, 00,000(40% of the budgeted cost)

For effective and better control purpose, Unit wise bifurcation of the total budgeted cost is more beneficial to the execute the aforesaid contracts .