Masonry Magazine May 2006 Page. 51
Business 101
Estimating the Correct Cost Per Unit
Ron Willis
MEACS
When it comes to estimating for the masonry industry, labor is a huge chunk of your final bid. In estimating, finding a correct cost per unit is essential. Some contractors make the mistake of estimating just the cost of the single mason when calculating the cost per unit; however, you need to account for all labor costs, not just the mason laying the brick and block. This is where the manday cost comes in.
Manday Cost
A MANDAY COST is the cost per day for a tended, supervised mason. The reason for a manday cost is that it's the only way to arrive at a cost per unit when you have both production people and support people involved in the construction of a project. If you only had one mason laying masonry units, for example, then it would be a matter of dividing his or her total wages per day by how many units laid in a typical work day (wages/number of brick laid = cost per unit).
However, should you add a laborer to the equation, it gets a little more intricate. You need to add the two workers' wages together and divide the total wages by the number of masons in this case, one then divide the number of units that the mason can lay in the same period of time.
No matter the size of your crew, this equation does not change. To give you a more complex example, let's say we have 30 masons, 25 laborers, one foreperson, two assistants and four forklift operators. With this given scenario, here's how you would arrive at a price per unit using the manday equation (see table):
In this scenario, the only people that are actually laying the units are the masons everyone else is a support person. Remember: Even as important as the foreperson is, he or she is a support person. The masons are the only "productive" people on the job. In this example, since there are 30 masons, you divide 30 into the total payroll for that day; this sets the standard for the entire job.
Should the production number change, due to difficulty or ease of laying the units, then the cost would change accordingly. Let's say your masons can only average 350 brick on columns. Then you divide 350 into $287.68, which would increase your costs to 82 cents per unit. However, should your production go up to, for instance 750, then the price per unit cost would be 38 cents.
Mason to Laborer Ratios
ESTIMATORS should build several manday cost scenarios, which we would call "crews." A crew consists of masons for brick, block, stone and cast stone work, and laborers for grouting, building scaffold and the like. The laborers should not be used too often because you are paid on the number of units laid. The laborers are still support crew they don't lay masonry! By adding additional laborers to a crew, you add the labor burden to the bottom of your estimate sheet. The production is the most important part of our trade it affects the cost and profit more than any other single thing.
In the masonry business, you should keep your crews based on a 1:1, mason to laborer, ratio- or as close as you can to it- at all times. Typically, the No. 1 reason that a job starts losing money is that the foreperson will begin to use more laborers than the 1:1 ratio. When you have a ratio of one mason to two laborers, your manday cost goes through the roof. This scenario puts the masons in a no-win situation. They cannot lay enough units to overcome the extra cost.
This is probably the most important aspect of our business in our industry trade. I hope this information is helpful for your business.
Ron Willis is owner of Masonry Estimating and Consulting Services (MEACS). A veteran masonry estimator, he has been in the masonry business for more than 40 years. He can be reached at (817) 822-8595 or ron@meacs.com.
MANDAY EQUATION
| | Support | Productive | Rate | Hours | Total Hours | Total Days Payroll |
|---|---|---|---|---|---|---|
| Foreperson | 1 | | $30 | 8.5 | 8.5 | $ 255.00 |
| Assistants | 2 | | $26 | 8.0 | 16.0 | $ 416.00 |
| Masons | | 30 | $22 | 8.0 | 240.0 | $5,280.00 |
| Laborers | 5 | | $11 | 8.5 | 42.5 | $ 467.50 |
| Laborers | 20 | | $10 | 8.0 | 160.0 | $1,600.00 |
| Operators | 4 | | $18 | 8.5 | 34.0 | $ 612.00 |
| Totals | 32 | 30 | | | | $8,630.50 |
| Divide by Total Number of Production People | | | | | | 30 |
| Divide by Number of Units a Mason Can Lay per Day | | | | | | |
| Manday Cost | | | | | | $ 287.68 |
| | | | | | | 527 |
| Cost per Unit | | | | | | $ 0.55 |
May 2006
Masonry 49