What is prime cost and provisional sum?

Traditionally, a prime cost is limited to the cost of supplying the relevant item, and does not include the cost of any work that relates to it (such as its installation). In contrast, provisional sums include allowances for both the supply item and all related work to be performed by the contractor.

What is Prime Cost civil engineering?

Prime cost generally is an allowance for articles to be provided by the contractor, of which price cannot be fixed at the time of tender. It refers only to the supply of materials and not to the carrying out of works. A specific amount will be earmarked in the BOQ for execution of such items.

What is prime cost and overhead cost?

Prime cost is cost of materials and labor involved in a production of commodity, excluding fixed costs. Overhead cost is the cost of on-going expenses such as rent,utility, and insurance.

What does PC rate mean?

PC stands for Prime Cost item. A Prime Cost item is an amount of money which has been allowed for an item in the project for which the labour which goes with that item has been included within the total price of the project. The PC amount is to supply the item only.

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What is Prime cost example?

A prime cost is the total direct costs of production, including raw materials and labor. Indirect costs, such as utilities, manager salaries, and delivery costs, are not included in prime costs. Businesses need to calculate the prime cost of each product manufactured to ensure they are generating a profit.

How do you calculate the prime cost?

Cost of Goods Sold (CoGS) + Total Labor Cost = Prime Cost Prime cost includes: Food inventory. Beverage inventory. Labor.

What are additional costs?

Related Definitions Additional Cost means the additional capital expenditure and/or the additional operating cost or additional taxes or all as the case may be, which the Contractor has or would be required to incur and which has arisen as a result of Change of Scope of work.

What is contingency sum?

A contingency sum can best be described as a sum of money allowed in the project budget, for expenditure on aspects of the project that were unforeseen or unforeseeable at the time of preparing documents. A contingency sum should be used during the design and construction phases of the project.

What is a provisional sum in a contract?

Provisional sums are generally an allowance or estimate (often described as a “best guess”) included within the contract price of a construction contract for works that are: not sufficiently defined, designed or detailed to allow an accurate determination of its cost at the time the contract is entered; and/or.

What is an example of an overhead cost?

Examples of Overhead Costs

  1. Rent. Rent is the cost that a business pays for using its business premises.
  2. Administrative costs.
  3. Utilities.
  4. Insurance.
  5. Sales and marketing.
  6. Repair and maintenance of motor vehicles and machinery.
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What are the components of prime cost?

The major two components of prime cost are direct materials and direct labor; totaling the two figures results in the calculation of prime cost.

How do you calculate overhead cost?

To calculate the overhead rate, divide the indirect costs by the direct costs and multiply by 100. If your overhead rate is 20%, it means the business spends 20% of its revenue on producing a good or providing services.

What is a PC amount in building?

What is a Prime Cost Amount? Prime Cost Amounts are sometimes also referred to as PC Sums. The JBCC defines a Prime Cost Amount as “An amount included in the contract sum for the delivered cost of material and goods obtained from a supplier as instructed by the principal agent”.

What is a PC sum in a quote?

The PC Sum, or Prime Cost Sum, mostly refers to the costs of fixtures and fittings. Providing serial/model numbers, and the exact quantities needed of your PC items will allow the contractor to give a more accurate PC Sum in your tender costs.

What is general attendance?

General attendance is the description of main contractor attendance available site wide to all suppliers or sub-contractors such as: Welfare facilities. External scaffolding. Temporary power and lighting.

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