Cost vs price - Revision history

Editor at 20:03, 20 November 2020

2020-11-20T20:03:10Z

← Older revision		Revision as of 20:03, 20 November 2020
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	In the construction industry, the term 'price' typically refers to the price offered by a supplier. This could relate to a price for carrying out part of the construction works, for the supply of goods, for the supply of services and so on.		In the construction industry, the term 'price' typically refers to the price offered by a supplier. This could relate to a price for carrying out part of the construction works, for the supply of goods, for the supply of services and so on.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Best value.		* Best value.
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	* Provisional sums.		* Provisional sums.

−	[[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

86.168.201.16 at 16:36, 3 January 2018

2018-01-03T16:36:27Z

← Older revision		Revision as of 16:36, 3 January 2018
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−	~~Cost~~ and price are ~~two terms that can often be~~ confused ~~easily~~.	+	The terms 'cost' and 'price' are are frequently confused with one another and used incorrectly. However, their meanings are clear, and very different:

−	The term ~~‘cost’ can be used to refer to various different amounts in construction (e.g. construction costs, lifecycle costs, whole life~~ cost~~), but generally~~ refers to the expense ~~that is~~ incurred in ~~relation to building works. Costs that are commonly incurred on~~ a ~~construction project tend~~ to ~~be divided into hard costs (those related to physical construction) and soft costs (those that are not instantly visible~~ or ~~tangible)~~.	+	* The term 'cost' refers to the expense incurred in the production of a product or service.
		+	* The term 'price' refers to the payment required for the supply of a product or service.

−	~~Price is~~ the ~~term used~~ to ~~describe the amount of compensation~~, ~~usually in~~ the ~~form of monetary payment, that~~ is ~~exchanged between one party and another~~ for the ~~provision of goods and~~/~~or services. It represents the value that will purchase an certain amount or measure of those goods and services~~.	+	Typically, in many businesses, the difference between what something costs to produce, and the price it is sold for equates to the profit earned by the producer / seller.

−	~~In simple economics~~, the ~~difference between~~ cost ~~and price is~~ the ~~profit that is earned~~ by the ~~business~~. ~~For example~~, ~~if a contractor contracts to complete~~ a ~~building~~ project ~~for £1 million~~ and ~~the~~ costs that are ~~incurred amount~~ to ~~£900~~,~~000~~, ~~then it will have earned £100,000 in profit~~.	+	However, in the construction industry, the term cost typically refers to the expense incurred in relation to building works. It can also be used to refer to:
		+
		+	* Wider project costs incurred by the client, such as fees, finance charges, land purchase costs and so on.
		+	* Long term costs such as lifecycle costs, whole life cost and so on.
		+
		+	Costs commonly incurred on a construction project can be categorised as hard costs (those related to physical construction) and soft costs (those that are not instantly visible or tangible).
		+
		+	In the construction industry, the term 'price' typically refers to the price offered by a supplier. This could relate to a price for carrying out part of the construction works, for the supply of goods, for the supply of services and so on.

	= Find out more =		= Find out more =

Editor: Created page with "Cost and price are two terms that can often be confused easily. The term ‘cost’ can be used to refer to various different amounts in construction (e.g. construction costs, l..."

2018-01-03T15:10:26Z

Created page with "Cost and price are two terms that can often be confused easily. The term ‘cost’ can be used to refer to various different amounts in construction (e.g. construction costs, l..."

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Cost and price are two terms that can often be confused easily.

The term ‘cost’ can be used to refer to various different amounts in construction (e.g. construction costs, lifecycle costs, whole life cost), but generally refers to the expense that is incurred in relation to building works. Costs that are commonly incurred on a construction project tend to be divided into hard costs (those related to physical construction) and soft costs (those that are not instantly visible or tangible).

Price is the term used to describe the amount of compensation, usually in the form of monetary payment, that is exchanged between one party and another for the provision of goods and/or services. It represents the value that will purchase an certain amount or measure of those goods and services.

In simple economics, the difference between cost and price is the profit that is earned by the business. For example, if a contractor contracts to complete a building project for £1 million and the costs that are incurred amount to £900,000, then it will have earned £100,000 in profit.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Best value.
* Budget.
* Capital cost.
* Construction costs.
* Cost.
* Hard costs v soft costs.
* Price.
* Provisional sums.

[[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]