QUANTITY SURVEYING LEVEL 06 - ASSIGNMENT - BATCH 02

Task 01 (M22) - Cost Planning 01) Cost plan for residential two story Building at Rathmalana

Elements A) Two story Building A.1 Substructure A.2 Superstructure A.1.1 Ground Floor A.1.2 First Floor A.3 Roof A.4 Finishes A.5 Furnitures and Interior A.6 Services Sub-total A B) Others B.1 Landscaping Sub-total B C) External Works C.1 External fencing C.2 Gates Sub-total C Total 1 (A+B+C) - Construction Cost (Excluding Preliminaries) Preliminaries 5% Total 2 - Construction Cost (Including Preliminaries)

Amount (LKR)

Cost/m 200m of GIA 40,000.00 25,000.00 35,000.00 5,000.00 10,000.00 15,000.00 50,000.00 180,000.00

8,000,000.00 5,000,000.00 7,000,000.00 1,000,000.00 2,000,000.00 3,000,000.00 10,000,000.00 36,000,000.00

22.22% 13.89% 19.44% 2.78% 5.56% 8.33% 27.78% 100.00%

800,000.00 800,000.00

4,000.00 4,000.00

500,000.00 150,000.00 650,000.00 37,450,000.00 1,872,500.00

2,500.00 750.00 3,250.00 187,250.00

39,322,500.00

196,612.50

02) Cost Plan no. 01 for similar house Amount (LKR) 175m of GIA

Elements A) Two story Building A.1 Substructure A.2 Superstructure A.1.1 Ground Floor A.1.2 First Floor A.3 Roof A.4 Finishes A.5 Furnitures and Interior A.6 Services Sub-total A B) Others B.1 Landscaping Sub-total B C) External Works C.1 External fencing C.2 Gates Sub-total C Total 1 (A+B+C) - Construction Cost (Excluding Preliminaries) Preliminaries 5% Total 2 - Construction Cost (Including Preliminaries)

Amount (LKR)

Cost/m 200m of GIA 40,000.00 25,000.00 35,000.00 5,000.00 10,000.00 15,000.00 50,000.00 180,000.00 4,000.00 4,000.00 2,500.00 750.00 3,250.00 187,250.00 -

8,000,000.00 5,000,000.00 7,000,000.00 1,000,000.00 2,000,000.00 3,000,000.00 10,000,000.00 36,000,000.00

22.22% 13.89% 19.44% 2.78% 5.56% 8.33% 27.78% 100.00%

7,000,000.00 4,375,000.00 6,125,000.00 875,000.00 1,750,000.00 2,625,000.00 8,750,000.00 31,500,000.00 700,000.00 437,500.00 131,250.00 568,750.00 32,768,750.00 34,407,187.50

800,000.00 800,000.00

500,000.00 150,000.00 650,000.00 37,450,000.00 1,872,500.00

39,322,500.00 196,612.50

Task 2 (M24) - Strategic Planning 01) Difference between cost and value The difference between cost and value of the above residential building of 200m2 GIA is , This word mainly adapted with the its market value. Advertising cost, interest on finance to cover cost of money invested in the building during the constructio period, selling price of one unit, its long term income etc. This means its actual construction value. Such as, Construction cost Fees payble to architects, quantity surveyors, consultants Legal Charges

Cost -

Value -

02)

Two methods of calculating value of the building I) Residual Method

This is a valuation method whish is sometimes used where the value of the property can be increased by carrying out certain works. A large house could, for instance, be profitably converted into flats when its potential will be exploited to the full. The building could be valued by taking its value after conversion and deducting the cost of conversion plus an allowance for developer's risk and profit. The residual figure will indicate the value of the property in its existing state but with a potential for development.
II) Profit Method

This is sometimes describes as the accounts method and is used where the value is largely dependent upon the earning capacity of the property, as is the case with hotels, cinemas and dance halls. The usual approch is to estimate the gross earnings and to deduct from them the working expenses, interest on capital and tenant's remuneration. The balance represents the amount that is available for the payment of rent. it is an exceedingly indirect approach and is best checked by some other method, such as the value per seat. It has, however, been found useful in rating valuation for the classes of property previously described.
03) Cost benefit analysis

Physical Constraints Project Size Timing External Physical Constraints Legal Constraints Right of Access Time needed for public inquiry Administrative Size of the project Uncertainties Unreliability of estimates on future trends Distributaries and Budgetary Constraints

Task 3 (M28) - Financial accounting 01) Profit and Loss Account year ended 31 May 2012 Rs. Sales Less- Cost of sales Opening stock Add - Purchase Less - Closing stock Gross Profit Add - other income Bank interest for deposit Less - expenses Electricity Telephone Wages Water Insurances 10,000.00 60,000.00 70,000.00 (5,000.00) Rs. 200,500.00 (8,000.00) 192,500.00

65,000.00 127,500.00

12,000.00 139,500.00 3,523.00 2,512.00 12,000.00 900.00 250.00

19,185.00 120,315.00

Balance sheet as at 31 May 2012 Rs. Fixed Assets Land and buildings Plant and machinery Lorry Total fixed asset Current Asset Stock Debtors Prepaymets Bank Cash Current Liabilities Creditors Accruals Short term loans Rs. Rs. Capital Employed 90,000.00 Opening capital 15,000.00 Add - net profit 200,000.00 305,000.00 30,000.00 120,315.00 150,315.00 Rs.

5,000.00 20,000.00 10,000.00 25,000.00 5,000.00

65,000.00

(30,000.00) (8,000.00) (3,000.00)

(41,000.00) 24,000.00 329,000.00 (178,685.00) 150,315.00 Closing Capital

Long-term creditors Total net asset

150,315.00

02)

Break-even volume of a business

Breakeven volume is a term often used in business to refer to the total number of units of a given product that must be sold at a certain price in order to completely cover the costs associated with that product. The idea is to not only reach this volume, but to exceed it so that the business can enjoy some type of profit from the production effort. Identifying this figure is important to the business operation, since projecting the breakeven volume can help company owners determine if the anticipated demand for a product is likely to be sufficient to generate enough revenue to make the manufacturing effort worthwhile. Calculating the breakeven volume begins with knowing the total costs involved with the production and sale of an individual unit of a good or service. This figure represents the absolute minimum that must be recouped on each unit produced in order to cover the costs of production and all other related costs. From there, it is important to determine the number of units that must be produced in order to keep expenses at that figure. Finally, businesses will set sale prices above the unit cost per unit and then determine how many of the finished units must be sold before all expenses are covered and the sales efforts begin to generate profits for the operation.

Identifying the breakeven volume is very important to the financial well-being of any type of business. By projecting potential sales in relation to production costs, the company can determine if the anticipated demand will be sufficient to generate enough cash flow to make the production viable. While a product may be of high quality and able to be produced at a reasonable rate, this does not necessarily mean consumers will actually purchase the good or service. Only as the demand is accurately identified and the total amount of revenue generated assessed in comparison to total costs is it possible to ascertain the current breakeven volume. It is important to remember that a number of factors can cause the breakeven volume for an established product to change over time. Increases in raw materials could significantly alter the cost of production, while changes in demand could also have an impact. For this reason, companies will assess the current breakeven volume for established products, determine what has increased or increased the volume since the last assessment and adapt the business operation and the production and sales efforts accordingly.

Task 4 (M29) - Manage Accounts 01) Cash flow graph Contract Amount Contract period Advance payment Retention April BOQ Extra work Variations Cash Out Advance Payment Less Retention 10% Advance Recovery 20% Cash In Cash Flow Cummulative cash flow 180,000.00 100,000.00 100,000.00 (8,000.00) (16,000.00) (10,000.00) (20,000.00) (25,000.00) (50,000.00) 175,000.00 25,000.00 (2,000.00) (56,000.00) 222,000.00 182,000.00 80,000.00 = = = = 900,000.00 06 months 180,000.00 45,000.00 May 100,000.00 June 150,000.00 July 250,000.00 August 280,000.00 September 40,000.00

80,000.00

100,000.00

250,000.00

280,000.00

150,000.00

40,000.00

180,000.00 80,000.00 100,000.00 250,000.00 280,000.00

56,000.00 70,000.00 (100,000.00) (194,000.00) (210,000.00) -

(194,000.00) (404,000.00) (379,000.00) (197,000.00)

150,000.00

40,000.00

(45,000.00) (30,000.00) 120,000.00 120,000.00 (77,000.00) (8,000.00) 32,000.00 32,000.00 (45,000.00) (180,000.00)