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Costing Procedure Of Flooring Contrator Essay

1955 words - 8 pages

You can’t take it anymore. If you have to look at those scratches in the living room floor, the foot traffic stains down the hallway, the Kool-aid stains under the dining room table, or the chipped tile in the kitchen one more time, you might go off the edge and wind up in the looney bin. You are tired of going to a friend’s home and secretly envying their perfect looking floors. Gone are the days of flipping through magazines and drooling over the pictures of nicely decorated rooms with flooring that looks amazing. So you ask your friend what company did their floor and how much it cost, not to be nosey, but to get an idea. After perusing the flooring aisle of your local home improvement store and deciding on the type you want to use, you have the contractor come by for an estimate. Your eyes widen in surprise when he tells you that it will cost more than what it did for your friend. How can this be? It just flooring, right? How can there be such a difference in prices?
Flooring contractors have a mix of variable costs and fixed costs in their operations, with the variable costs being the vast majority. Fixed costs include the following: cost of vehicles, cost of equipment, cost of facilities, and cost of insurance. Contractors will pass fixed costs on to the customers by usually adding anywhere from $1 to $2 to the cost of installation per square foot. Everything else is variable, because what they charge depends on the number and types of jobs the contractor performs, and the labor and materials required.
To get a better understanding of the scope of the variable costs, let’s take a look at how a contractor determines the bid for a job. A typical bid for a flooring job is broken down into six phases: Initial Preparatory Work, Floor Preparation, New Flooring Material, Installation, Finishing, and Final Work. Costs during each phase are billed either as materials, labor hours, or as labor per square foot. Materials are usually billed at contractors cost plus 25%. Labor rates are billed at the given rate for a minimum of one hour and then in half hour increments. Labor per square foot is the given rate per square foot of floor area.
Initial Preparatory Work involves all actions required to be completed before the contractor can begin working on the floor. There are three parts to this section. Initially, all the furniture and fixtures (toilet, sinks not attached to walls) need to be removed. Depending on the quantity/size of furniture/fixtures that need to be removed, contractors will typically charge between $15 and $50 per hour. Customers can cut out this cost if they agree to have the items removed prior to the contractor arriving. However, if it is agreed upon and the items are not removed, the contractor will usually charge 150% of the normal rate, because this will add additional time to the job, causing him to possibly run behind schedule for another job, and he schedules jobs based on time estimates. The next part is the removal and...

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