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Construction Cost Labor Vs. Materials by Divisions

Updated March 21, 2017

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.

Considerations

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.

Size

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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About the Author

Mark Fitzpatrick began writing professionally in 2006. He has written in literary journals such as Read Herrings and provides written online guides for towns ranging from Seymour, Connecticut to Haines, Alaska. He earned a Bachelor of Arts in political science from the University of Massachusetts.