Construction Cost Labor Vs. Materials by Divisions

Written by mark fitzpatrick | 13/05/2017
Construction Cost Labor Vs. Materials by Divisions
Construction costs can vary between high human capital or material resources. (Mario Tama/Getty Images News/Getty Images)

Working on a construction project involves cost accounting. This means planners need to consider how much labour and materials will cost to each level of the construction process. Anything that is too expensive needs to be reconsidered to cut costs.

Expert Insight

In accounting programs across the country, cost accounting tries to mathematically consider three variables: materials, labour and overhead. Overhead consists of the indirect costs that are difficult to ascertain at first. But since you can calculate how much a labour project could cost and how much goods are, an accountant can tell a manager how much a construction project ultimately will cost.


Materials need to be bought. Excess materials or waste needs to be disposed of. The best money management tip is usually to buy material in bulk and to buy directly from manufacturers. It is also recommended to buy materials long before any labour costs are considered. Labor costs are wasted when materials are not on hand for labour to utilise.


Labor costs may seem daunting, but effective material usage should not enhance labour costs. With capital investments, (such as tools), effective planning, (which may be considered an overhead cost), and the materials all set, a planner may not have to invest heavily in labour costs.

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