Costs of the Construction Firm

One of the peculiarities of the construction industry is that work is obtained in the form of contracts for projects which are large and indivisible but that the work load relating to each project is spread over a long period of time. Costs (and revenue: see Chapter 13) have therefore to be examined in three distinct ways. Firstly, the cost of the project as a whole; secondly, the cost of the total project must be related to the work load over time; and lastly, the cost of various alternative work loads at a given point in time must be analysed. The usual cost curves of economic analysis are of this last type. The method of transition from the first to the third will be discussed first.