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Terms used in the process of estimating project budgets should not be confused with similar terminology used by government or by the property industry. Some of these terms include functional-unit cost, cost per square metre, cost per cubic metre and elemental cost.
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Terms in common use in public works and major commercial projects
The terms used in the calculation of project budget estimates should not be confused with similar terminology used by government in assessing projects for compliance or used by the property industry (eg the Method of Measurement for Lettable Area, Property Council of Australia) in the measurement of building area for the purposes of sale or leasing.
Functional-unit cost
This relates to the cost per unit of performance or occupancy for which the building is functionally designed such as a place in a school, a room in a hotel, a seat in an auditorium or church, a bed in a hospital, or a car space in a car park. It is obtained by dividing the number of such units into either the building cost or the net project cost (the cost of all buildings including their proportion of preliminaries and all works and services external to the building including preliminaries, but excluding contingencies, and all costs in connection with design, documentation and contract administration). The functional-unit cost is a simple method of estimating and comparing projects. It is only suitable for long-range budgeting for buildings of similar types where individual variations between buildings tend to cancel out. It is not suitable for the detailed estimating of individual buildings.
Cost per square metre
The cost per square metre is an easy method to use and is normally employed in the initial stages of a project. Adjustments to rates need some skill in application to compensate for differences in site configuration and conditions, building shape, storey heights and other such factors.
Cost per cubic metre
The cost of a cubic metre of enclosed building volume measured between the outer faces of the walls multiplied by the height, taken from the underside of the lowest floor to a height of 600mm above the flat roof or a line midway between the point of intersection of the outer surface of walls and roof and the apex of a pitched roof.
Roofs of unusual shape are measured and the volume calculated separately.
Foundation costs are calculated and added to the above.
Projections such as porches, verandas, balconies, bays, oriels, turrets, fleches, domes, dormers,chimney stacks, lantern lights, terraces, external steps and towers are measured and the additional added to that for the main structure.
Despite being a quick-and-simple means of estimating, cubing is a method which is now seldom used. It has disadvantages such as differences in methods of measurement, adjustments in cost for differences in building shape and size, storey heights, construction, finishes and equipment, and the general lack of information of cube costs for comparison.
Elemental cost
The cost of the various elements or sub-elements of a building. Once sufficient information becomes available from cost analyses, this method is speedy and reliable but requires some skill in interpreting and integrating elements. It can help the architect assess alternative solutions during design development.
Refer to Acumen note Project budget management for further information.
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