Estimation And Costing | Types Explanation

Cost Estimation is a method widely used in our day by day life by various people, engineers, and contractors. But a common didn’t know what is a Cost Estimate and how it is calculated? So, here we are with the topic Estimation and Costing considering the understanding of common man.

The approximation of program, project or operating costs is an estimate of costs. The professional preparing cost estimates is a cost estimator. The cost estimators, whose title can be followed by a modifier like a building estimator, or an electrical estimator, or by a head estimator, are different.
Let’s began our topic into deep knowledge for better guidance:-

Table of content:-

What is Cost Estimate?
Types Of Estimation And Costing
Summary

What is Cost Estimate?

Definition of Estimation and Costing is provided by the Government of U.S., Accountability Office.

Definition:- “The summation of individual cost elements, using established methods and valid data, to estimate the future costs of a program, based on what is known today.

Types Of Estimation And Costing

What Is Estimation And Costing
What Is Estimation And Costing

There are different types of cost estimates for different projects and transactions, which differ in configuration and methods of preparation. Some of the most important types are:-

1. Manufacturing cost:- Manufacturing Cost is the sum of the cost of all resources used for the production of a product.

2. Software development cost:- Software development costs generally relate to financial expenditures for software development and testing.

3. Construction cost:- Construction costs will be those arising from actual building work itself and the value of the contract with the major contractor for certain projects may be determined.

4. Facility operation cost:- Expenses related to the operations of the business or to the operation of a device, component, piece of equipment or plant shall be the operating (operational) costs.

5. Aerospace mission cost:- Aerospace mission cost is the cost related to space and research related to those space work.

6. Facility maintenance and repair cost:- It refers to the maintenance and additional repairing cost of a building or a monument.

7. Resource exploration cost:- The cost of determining a mineral deposit’s existence, location, quality or economic value.

8. Facility retirement cost:- Refers to the cost expended on a retirement plan of a person.

9. Facility rehabilitation and renewal cost:- Meets renewal costs so that services are delivered at the same performance level as they were initially delivered.

Summary

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