Financial Plan of Building Order

1
Lecture was elaborated with the help of grant
project of Ministry of Education, Youth and
Sports, FRVŠ n. 2005 Innovation of Subject
Financing of Building Order

• Financial Plan of Building Order

2
Preparation of Building Order Financing Side of
Supplier

• Project documentation creation (acquisition)
• Overview of activities
• Building object's price assessment
• Time plan of construction (time harmonogram)
• Plan of recourses
• Financial plan

3
Principle of Calculation of Building Order
4
Building Object Price Assessment

• Costs for building part are calculated as a sum
  of costs
• for particular building works
• materials not included in the building work
  (valuated as a specification)
• shift with materials
• For calculation it is prepared the item budget
• Item budget includes basic costs
• Item represents
• building works
• material in specification
• shift with materials

5
Overview of Groups of Building Sections
Number Title of group of building sections
0 General construction and works
1 Earthworks
2 Foundations, special foundations
3 Vertical and complete constructions
4 Horizontal constructions
5 Communications
6 Construction of surfaces, floors
7 Associated building production (handcrafts, installations)
8 Pipage, conduction
9 Finishing works, demolitions
6
Price of Building Work - Costing Model
(Formula)

• Unit price of building work
• Direct costs (DC)
• Direct material (M)
• Direct wages (W)
• Other direct costs (ODC)
• Machines and machinery (S)
• Indirect costs (IC)
• Overhead product costs (OPC)
• Overhead administrative costs (OAC)
• Profit (P)
• Price totally

7
Costing Model Direct Costs

• Direct material (M - determinable)
• Number of item
• Description of item
• Measure unit of item
• Norm of consumption
• Purchase price of material
• Item totally
• Unit weight
• Weight totally per item

8
Costing Model Direct Costs

• Direct wages (W - determinable)
• Code (number) of profession
• Description of profession
• Output in standard (man) hours (Nh)
• Wage hour tariff (CZK/hour)
• Item totally

9
Costing Model Direct Costs

• Machines and machinery (S with determinable
• Output)
• Code (number) of machine (own company's
  classification)
• Description of machine
• Output in standard (machine) hours (Sh)
• Tariff per Sh
• Item totally

10
Costing Model Direct Costs

• Other direct costs (ODC)
• Payments to funds of social and health insurance
  from direct wages
• Transport costs (realized by own car or bought
  transport services)

11
Costing Model Indirect Costs

• Overhead product costs (OPC)
• Includes all kinds of costs arising in the frame
  of production as a group of costs connected with
  realization of more activities (building works)
• For example
• Costs for bought services connected directly with
  production process (telephones, energy instead
  direct costs for machines)
• Costs for consumption of overhead materials
• Wages of foremen, site engineers etc. including
  payments into funds of social and health insurance

12
Costing Model Indirect Costs

• Overhead administrative costs (OAC)
• includes all costs connected with administration
  and management of company
• For example
• costs for bought services connected with
  administration of company (telephones, energy,
  leases)
• costs for overhead material consumption
• wages of workmen including payments into funds of
  social and health insurance
• depreciation of long-term property

13
Costing Model Profit

• Profit
• assigned according to the
• requirements of company
• possibilities coming from situation on the market
• Price totally DC (MWODCS) IC (OPCOAC) P

14
Price of Building Work calculation for
production unit (m.u.)

• Costs for material per item in CZK
• Norm of material consumption x purchase price of
  material
• Cost for wages per item in CZK
• Amount of Nh x wage hour tariff
• Possible premium payments in from wage
• Costs for machines per item in CZK
• Amount of Sh x hour tariff of machine work
• Other direct costs totally in CZK, payments into
  funds
• ? Costs for direct wages x 0,35 (year 2006)
• Overhead production costs in CZK tariff x basis
• Overhead administrative costs in CZK tariff x
  basis
• Profit in CZK tariff x basis

15
Price of building workrecapitulation
Unit price of building work Unit price of building work Unit price of building work Unit price of building work Unit price of building work
Direct costs (DC) Direct costs (DC) Direct costs (DC) Indirect costs (IC) Profit (P)
M A T E R I A L Wages ODC Machines OC OC production administrative Profit (P)
M A T E R I A L Costs conversion (CC) Costs conversion (CC) Costs conversion (CC) Profit (P)
M A T E R I A L Direct costs conversion (DCC) Direct costs conversion (DCC) Gross margin (GM) Gross margin (GM)