Specification

Specification describes the nature and

class of work, material to be used in the
work, workmanship and it is very
important for the execution of the work.
The cost of the work depends much on
specifications

CIV18R372- ESTIMATING AND COSTING

Necessities of Specifications

(i) Specification describes the quality and quantity of

different materials.
(ii) It specifies the workmanship.
(iii) It specifies equipment tool and plants to be used
for work.
(iv) It is used for legal advice between the owner and
contractor.

CIV18R372- ESTIMATING AND COSTING

Essential requirements of specifications

 Subject matter, grammar, abbreviation,

section of word, development of style,
accuracy, clearness, brevity

CIV18R372- ESTIMATING AND COSTING

Types of Specifications

General specification

Detailed specification

Standard specification

CIV18R372- ESTIMATING AND COSTING

General Specifications

In general specification, nature and class of works,

name of materials and proportion that should be used in
the various items of work. It gives brief description of
all items of work. It is useful for estimating the project

CIV18R372- ESTIMATING AND COSTING

 Detailed specification
:
 
The detailed specification form a part of the
contract document. The detailed specifications
specify the following. - Quantity and quality of
materials - Proportions of materials - Execution of
work for a project - Type of machinery,
equipments and tools and plant - Method of
protection of finished work - Involves
responsibility of incidental damages.

CIV18R372- ESTIMATING AND COSTING

Standard specification

 The specifications are written completely for all items of

the work. - It is possible to standardize the specifications
for most of the work. - Each department develops its own
standard specifications - It saves time, labour, stationary
expenditure

CIV18R372- ESTIMATING AND COSTING

Problem1

A residential building constructed 15 years

before is situated on a plot whose land area
is 400m2. The plinth area of the building is
180m2. The cost of construction of the
building is Rs 3 Lakhs. The cost of land is
Rs 200 per m2. The rate of depreciation for
the value of the building is 1% annum.
Calculate the local value of the property.

CIV18R372- ESTIMATING AND COSTING

Solution
Given:
Plot Area= 400 sq.m
Plinth Area =180 sq.m
Cost of the construction = Rs. 3,00,000
n= 15 years
Cost of land per m2 = Rs. 200
Rate of depreciation = 1% per annum

CIV18R372- ESTIMATING AND COSTING

Solution
Given:
Plot Area= 400 sq.m
Plinth Area =180 sq.m
Cost of the construction = Rs. 3,00,000
n= 15 years
Cost of land per m2 = Rs. 200
Rate of depreciation = 1% per annum

CIV18R372- ESTIMATING AND COSTING

Solution
Total Cost of land= Rs. 80000
Depreciated value = P[(100-rd)/100]n
= 300000[(100-1)/100]15
= Rs. 258017.50
Total cost of the property
= Rs. 258017.50+80000
= Rs. 338017.5

CIV18R372- ESTIMATING AND COSTING

Problem 2

A building is constructed on a land costing

Rs 2 Lakhs. The cost of construction was 6
lakhs. The life of the building is 60 years.
Sinking fund provided @ 3% interest rate.
The owner expects returns of 5% on cost of
land and 8% on cost of construction.
Annual repair may be 2% of the cost of
construction. Other outgoing to be 30% of
net returns. Calculate the rent per month.

CIV18R372- ESTIMATING AND COSTING

Solution
Given:
Cost of land= Rs. 2,00,000
Cost of the construction = Rs. 6,00,000
n=60 years
Returns on land= 5%
Returns on Construction= 8%
Annual repairs = 2%
Outgoings = 30% of net returns

CIV18R372- ESTIMATING AND COSTING

Solution
Amount of Returns from land= 5% x 200000
= Rs. 10000
Amount of Returns from Construction
= 8% x 600000
= Rs. 48000
Expected net return = Rs. 58000
Sinking fund = Si/[(1+i)n-1]
= 800000x0.03/[(1+.03)60-1]
= Rs 3679.70
CIV18R372- ESTIMATING AND COSTING
Solution
Annual repairs = 2% x 600000
= Rs. 12000
Other Outgoings = 30% x 58000
= Rs. 17400
Total Outgoings = Rs. 33079.77
Gross rent =Rs. 91079.77
Rent per month = Rs. 91079.77/12
= Rs.7589

CIV18R372- ESTIMATING AND COSTING

Problem 3

A building has been constructed for Rs 12

lakhs assuming its salvage value at the end
of 6 years is Rs 3 Lakhs. Determine the
depreciation and book value for the 6th
year by (i) Straight line method (ii) Constant
percentage method (iii) Sinking fund
method assuming 4% rate of interest

CIV18R372- ESTIMATING AND COSTING

Solution

(i) Straight line method

Depreciation=(Original Cost– Scrap Value)/Life in
years
= 1200000-300000/6 = Rs. 150000
Year Depreciation Book Value
(Rs.)
0 - 1200000
1 150000 1050000
2 150000 900000
3 150000 750000
4 150000 600000
5 150000 450000
6 150000 300000

CIV18R372- ESTIMATING AND COSTING

Solution

(i) Constant Percentage Method

Annual Depreciation=1- (S/C)1/n
= 1- (300000/1200000)1/6 = 0.2063

Year Depreciation Book Value

(Rs.)
0 - 1200000
1 247559 952441
2 196488 755953
3 155953 600000
4 123780 476220
5 98244 377976
6 77976.3 300000

CIV18R372- ESTIMATING AND COSTING

Solution

(i) Sinking Fund Method

Total amount of sinking fund to be accumulated at the end of 6 years
= 1200000-300000 = Rs. 900000
Annual Sinking Fund=900000*.04/[(1+0.04)6-1] = Rs. 135686
Year = 1- (300000/1200000)
Depreciation
1/6 Book Value
= 0.2063
(Rs.)
0 - 1200000
1 135686 1064314
2 141113 923201
3 146758 776443
4 152628 623815
5 158733 465081
6 165083 299998

CIV18R372- ESTIMATING AND COSTING