Most frequently in the construction of housing projects, there needs to be a well reviewed budget in order to see off the construction project completion and well as to see the construction company attain profits as it is the main aim of the business. To attain profits in the project, the construction company in charge of the construction needs to put into consideration some factors which would affect the profitability of the construction. The first thing the company in charge of the project would consider is the labor costs. This is the expenditure that would be used by workers to see construction from the ground level to where it’s required. Also, the company might account for indirect labor costs where it pays up other freelancers depending on the terms and conditions agreed upon (Cain, 2008). Another thing to consider is the transport costs. Transporting of materials would incur costs and the construction company should keenly consider it. Materials that are to be used in the project will definitely cost money and that needs to be considered.
The best method that the construction company would use to calculate the profit is the use of a profit and loss statement which would identify the direct cost, indirect costs, the revenues as well as the overhead expenses. The method is suitable since it will pin point out exactly where there arises a problem and also the spot for best performances. The efficiency in discovering this enables the construction to make amendments which are necessary preventing misuse of losses. To achieve the goal as planned within the time planned the method is most suitable. The method fairness and reasonability comes in since the accountability of resources is inevitable. Also, instant financial feedback is provided preventing stoppage of ongoing works. When it comes to identification of loop holes the method qualifies to be fair and reasonable too.
