When estimating labor costs, what is a common practice?

Using per-hour labor rates is a common practice when estimating labor costs because it provides a clear and precise method for assessing the costs associated with labor for a project. This approach allows for flexibility, as it can accommodate varying skills and job complexities. By applying a per-hour rate, estimators can accurately predict total labor costs by multiplying the number of hours anticipated for a project by the specific hourly wage of the workers involved, which may vary based on experience or job requirements. This method also helps in adjusting estimates based on actual working conditions or unforeseen delays, leading to more reliable financial planning for projects.

In contrast, estimating based on project completion time may overlook individual worker productivity differences, while calculating flat rates for all projects can lead to inaccuracies, as it doesn’t account for the unique needs of different job sizes or complexities. Estimating only for electricians disregards other trades that may contribute labor to a project and does not provide a comprehensive overview of total labor costs.