Unit Cost Rates and Composite Rates Explained

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Hanna Wolfe July 15, 2018
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Applying unit cost rates is a time-consuming process, but it's the most accurate method for estimating the costs of a project and is often the preferred method by estimators and builders.

However, there's a method that's much quicker with almost the same degree of accuracy. This method uses composite rates.

Introducing Building Components

A component is an essential part of a building which is manufactured as an independent unit, that can be joined to other elements to form a more complex item. 

Generally, components can be sourced from a single supplier, or built by the builder. A combination of components may be described as an assembly. 

Examples of building components are Roof Trusses, Retaining Walls, Footings, etc.

Breinz Unit Cost Rate

How to cost a Component?

Components or Assemblies always combines two or more items (or unit cost rates) which have a related quantities. Composite rates can easily be measured to provide accurate figures. A component contains one or more of the following cost:

  • Materials and cartage
  • Direct labor and subcontract labor
  • Plant and equipment.

For example, a Retaining Wall is a component consisting of the following items:

  • Reinforcement for footings
  • Concreter to lay REO
  • Concrete to Footings
  • Blocks
  • Block Layer
  • Reinforcement to the Block Wall
  • Concrete to Core-fill
  • Concrete Pump

The unit cost of above items is the total cost of all areas that make up the item, divided by its quantity. You could then develop the unit cost rate.

For the Retaining Wall, a composite rate includes unit cost rates for all the above items. The unit rate would relate to the square meter or volume of the wall (square meter is more easily measured from the drawings).

Examples of using component rates are:

  • Construction Cost Per Square Meter
  • Laying of Foundation Per Meter
  • Laying of Slabs Per Square Meter
  • Masonry Walls Per Square Meter
  • Painting Per Square Meter

How to use Component / Assembly rates?

An assembly rate can only be applied to like work (e.g. the composite rate for a 300 wide X 400 deep footing can't be used for a footing that's 300 wide X 600 deep).

Composite rates for footings in different soils may need some adjustments too. In each case, the unit cost rates for the component items will vary.

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