Flashcards in 7. Financial Resources Deck (5)
What is expenditure?
When a project is undertaken, the parties involved will have to make various payments – their expenditure. The promoter generally has to make payments to one or more main contractors. On traditional contracts they may have to pay designers’ fees and other specialist fees.
What examples will incur expenditure?
>to suppliers of materials;
>to subcontractors for work carried out;
>to internal or external plant hire companies; and
>to directly employed labour;
What is meant by the term 'price'?
The price is the sum of money charged by a contractor or supplier to cover its costs and also pay a profit.
What is meant by the term 'surplus'?
It may be that the actual cost incurred may be different from the estimated cost, in which case the profit will be different from that anticipated. The price will invariably remain the same so often the profitability is indicated by the surplus – quite simply the difference between the expenditure and the income. A negative surplus indicates the actual costs are greater than the price received.