Components of Rate Analysis

The Components of Rate Analysis is depend on the effect of it on rate analysis. The primary Components of Rate Analysis are as below,

1.   Material cost inclusive  of wastage

2.   Labour cost

3.   Plant & machinery owning and operative charges

4.   Water charges

5.   Overheads

6.   Profit


 All above cost are calculate either cost per unit item or by percentage.

Components of Rate Analysis
Fig. Components of Rate Analysis

1. Materials Cost:-

This is the primary Components of Rate Analysis. As per detailed specification, quantity of an item is calculated. There are various factors like specification, composition, quality of materials considered for deciding material cost. Transportation cost, storage & handling cost, loss of theft, losses due to various factors also take into account while deciding cost of material for rate of analysis. Based on market rates, per unit rate is calculated.

Following price too is considered:-

  • Freight & transportation, as well as loading & unloading
  • Taxes & insurance
  • Profit on Cement, steel stone chips and bitumen not included if supplied departmentally.

2. Labour cost:

Following factors are considered for labour prices,

  • Number of labour required as per class (Skilled or unskilled & helpers)
  • Daily wedges of labour
  • Quality of their work
  • Capacity of work i.e. or work done per day


3. Equipment, Tools and Plant cost

This cost is calculated on the basis of equipment used for particular work per unit item.

For example concrete mixer as per unit of concrete.

Certain tools and plants are tough to allocate as per the specific item hence their cost are considered in establishment charges.

For some special equipment generally we consider 1% to 5% of total estimated cost is provided for purchasing of insruments.

4. Overhead & establishment Charges:

  • These charge can be included following charges,
  • Office Rent,
  • Depreciation on equipment
  • Salaries of office staff,
  • Postage, lighting, travelling, telephone account
  • Theft or loss
  • Go-Down rent
  • Small tools, planks, ladders, ropes, hand tools for workmen
  • Repairs & depreciation for tools and plant
  • Lighting at site
  • Mobilization of establishment
  • Public Relations
  • Labor Welfare & safety
  • Workmen compensation, insurance
  • Interest on investment

This is actually 2.5% up to 5

Overhead charges will increase with delay in project.

5. Profits:

The percentage for profit is depend upon the type of project.

·         For small to medium project profit is considered as 15%

·         For large project profit is considered as 10%

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