CSM30004: Integrated Construction Engineering and Management

Week 9 Activity

Task 1
Assume you can lease an item you need for a project for $800/day; to purchase the item; the
cost is $12,000 plus a daily operational cost of $400/day. How long will it take for the purchase
cost to be the same as the lease cost?

Task 2
A four months project (February to May) looks at the incurred costs and incomes from the
contractor’s position.

Client The client pays four monthly payments of $5,000 one month
after invoice
Labour The contractor employs labour at $2,000 per month paid in
month of work
Materials The contractor procures materials at $500 per month; the
supplier gives one month credit
Equipment The contractor hire equipment at $1,500 per month; payment
is required one month in advance

Make a cash flow statement.

Task 3
Calculate the labour cost from the following table:

Employee’s salary $6000

Employee’s associated labour costs See below

Employee’s contribution to overheads 25% of salary=$1,500

Employee’s contribution to company profit 25% of salary=$1,500
 CSM30004: Integrated Construction Engineering and Management
Week 9 Activity

Cost per month Days lost per month

1 Medical insurance $200
2 Sickness benefits 1
3 Annual holiday 2
4 Training course $50 1
5 Protective clothing $50
6 Car allowance $400
7 Housing allowance $100
8 Subsistence allowance $100
9 pension $200
10 Tool allowance $100
11 Standing time 1
12 Inclement weather 1
total $1200 6

Task 4
Calculate the cost rate per hour to the employer for an employee working either 5 days x 8
hours = 40-hour week or 6 days x 10 hours = 60-hour week.

Note:

• Corporate overheads and profit margins have not been included in this example.
• Award rate of $800 per 40-hour week.
• Assume the award provides 4 weeks annual leave, 2 weeks annual public holidays, 2
weeks sick leave annually, plus a 17.5% loading on the award rate during annual leave.
• Assume site allowance $9 per hour on base 40-hour week only.
• Statutory loadings (superannuation, long service leave, payroll tax, worker’s
compensation insurance, etc.) = assume 25% of total paid to employee.
• Ignore any severance pay in this example.
• Allow for weekday overtime at 1.5 x base rate for the first two hours per day, 2 x base
rate for any hours above that.
• Allow for weekend overtime at 2 x base rate for all hours on Saturday and/or Sunday.
• Assume all public holidays will be non-working days.