ABSTRACT
The procedure described in the last chapter for estimating the prime cost of an activity was based on predicting the quantities of the various inputs of materials, operatives’ time etc. Each quantity was then multiplied by its estimated unit cost. Operatives’ performance rates were based on the rate of processing the main product, while allowing for the amounts of dependent products built in at the same time. The total of these activity costs, the Works overhead costs, and a suitable contribution to the general overhead, became the bid price.
