ACCRA POLYTECHNIC

DEPARTMENT OF BUILDING TECHNOLOGY

2014/2015 END OF SECOND SEMESTER EXAMINATIONS
HND BUILDING TECHNOLOGY III
BUT 304 BUILDING ECONOMICS - TIME 2HRS
INSTRUCTIONS
THIS PAPER IS IN TWO SECTIONS, ANSWER ALL QUESTIONS IN SECTION A AND
ANY TWO IN SECTION B. SECTION A CARRIES 50 MARKS AND SECTION B 50
MARKS.
SECTION A
Question One
The contract plan of the new building departments administration block is shown in Table T1
and the budget for this work in table T2. At the end of week 29, the current progress is recorded
as shown in table T3. Actual costs to the end of week 29 have been recorded and are shown in
table T4
i.
ii.

Draw up a table of variances and analyse the cost content (20 marks)
Make recommendations to the site manager for future actions (5 marks)
CODE
ACTIVITY
Earthmoving gang & Plant
10
Reinforcement fixing gang X
20
Reinforcement fixing gang Y
30
Carpenter gang
40
Labourer gang
50
Concrete gang
60
Masonry gang
70
Project Overheads
80
TABLE T1:
Starting Date
CONTRACT PROGRAMME
Week Beginning
1
A Sit Clearing
5
B Foundation Excavation
15
C Foundation Concrete
14
D Footings
17
E Hardcore Filling
17
F Floor Slab
7
G Walling
7
H Roofing

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Activity Duration
in Weeks
13
14
19
17
22
23
16
18

ACTIVITY
DESCRIPTION
A Site Clearing
B Foundation Excavation
C Foundation Concrete
D Footings
E Hardcore Filling
F Floor Slab
G Walling
H Roofing
BUDGET TOTAL - GH

COST
CODE
10
111
20
30
25
10
196

TABLE T3: Progress as

at end of week 29
ACTIVITY
DESCRIPTION
A
B

20
30
45
20
25
120

D
E
F
G
H

30
40
30
70

40
72
42
80
194

50
10
30
30
20
30
45
20
60
245

60
70
80
150

70
30
30
20
30
110

80
27
30
35
6
34
20
10
8
170

Start Date
Activity
Week Beginning Duration in
weeks

Sit Clearing
Foundation
Excavation
Foundation
Concrete
Footings
Hardcore Filling
Floor Slab
Walling
Roofing

TOTAL
GH

TABLE T2: Budget Value

1
6

13
17

16

28

14
16
18
14
30

36
38
23
33
38

TABLE 4: Actual cost up to the end of week 29 (GH )

Cost
Code
Actual
Cost

10

20

30

40

50

60

70

80

Total

120

100

30

310

20

240

45

150

1015

Question Two
a. A sum received sometime in the future will always be of worth that is less
than the same sum of money today. Write down the main factors that account
for this.

( 4 marks)

b. Construction is a major capital expenditure, which clients do not commence

until they are certain that there is a benefit. In anticipation of this capital
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148
122
165
101
114
287
60
158
1255

expenditure, summarise the main requirements of the construction client.

(4 marks)
c. A client requires an advice to buy a piece of land in December, 2015 at a price
of GH 7,000.00. The client is certain that in December 2017, the land will
worth GH 8,500.00. Given that the guaranteed interest rate at the bank is
7%; should the client undertake the investment in the land? (6 marks)
d. A government employee whose monthly salary is GH1,500 is considering
entering into a mortgage for a two bedroom apartment worth
GH120,000.00. The mortgage is to be retired in fifteen years based on an
interest rate of 17%. Advise the employee whether the transaction is worthy if
40% of his monthly salary is to be retained for other basic expenses. (10
marks)
SECTION B
Question One
i)

ii)

Elemental analysis allows the comparison of the costs of the same elements to be
compared between two or more buildings. Write down the MAIN reasons as to why
there may be differences in costs between the same elements in different buildings.
(6marks)
A reinforced concrete basement car park (size 50m x 30m x 10m deep) is to be built
on the Polytechnic Campus to ease traffic congestion. As the deputy contract manager
to the project, you are required to calculate an appropriate BOQ rate of excavation for
foundations, other than top soil, rock or artificial hard material maximum depth 510m.
Advice the contractor to select the more economic method of working between the
methods outlined below.
Method A
Open cuts with battered sides (assume total volume of excavation equals 2.5 x net
volume); the method will require additional working space to allow for erection and
stripping of shuttering to outer face.
Method B
Steel cofferdam built around net perimeter of basement
Assume the following net costs based on quotations from subcontractors:

Excavation open cut

GH 10/m3
Disposal on site
GH 1/m3
Bring back and fill
GH 2/m3

Excavation restricted within cofferdam

GH 25/m3

Sheet piling (assume 15m deep)

GH 35/m3
Mobilization/demobilization piling rig
GH 500 Each way

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Extract cofferdam piling

GH 5000
Site Overheads 12% , head office overheads and profit- 17.5% (19 marks)

Question Two
a. Briefly explain what is meant by cost management in building economics perspective. (2
marks)
b. Whole life costing (WLC) are substantially greater than capital or initial costs. It is one of
the three evaluation processes that need to be undertaken during the phase of any project.
List the
i)

basic steps to be followed in order to identify whole life cost of a building ( 4 marks)

ii)
major benefits in implementing WLC.
(6 marks)
c. It is desired to compare the whole-life costs of three different windows (Type A
Jalousie window), (Type B Timber casement window) and (Type C Anodised
aluminium window) to an office building, whose life span is 45 years. The compound
interest rate for this transaction is 5% per annum. Advice management on the selection of
the window type and justify your answer.
Type A
The cost of this window is GH 90,000.00 fixed complete and to be repainted every 5 years at a
cost of GH 5,000.00 and require renewing at GH 1,000,000 after 25 years.
Type B
The casement window has an initial cost of GH 160,000.00, fixed complete and requiring to be
treated every ten years at a cost of GH 2,000.00.
Type C
This will cost GH 140,000.00, fixed complete and will last the life span of the building without
any maintenance except the sum of GH 300,000.00 which is to be allowed for general repairs
after 25 years. (12 marks)
Question Three
a) Briefly describe the MAIN concept of cost control on building projects. ( 4 marks)
b) Explain FOUR major factors affecting the economics of the building industry (6 marks)
c) Explain the following as used in building economics
i.
Microeconomics
ii.
Macroeconomics
(4 marks)
d) An essential tool for financial control is the cost plan. Write down the FOUR main
methods of estimating the cost of a building project.
(4 marks)
e) Describe two of the methods in (d) above
(7marks)

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