What costs do contractors and subcontractors primarily focus on?

Contractors and subcontractors primarily focus on project costs because these encompass the direct expenses associated with completing a specific project. Project costs include materials, labor, equipment, and any other costs that can be directly attributed to the work being performed. By managing and controlling these costs, contractors ensure the project stays within budget while meeting deadlines and maintaining quality.

Operational costs, while important for overall business sustainability, do not directly pertain to the specific expenses incurred for a project. Indirect costs are costs that cannot be directly linked to a specific project, such as administrative expenses, and are often treated differently in cost accounting. Fixed costs remain constant regardless of the level of production or project activity and can include expenses like rent or salaries of permanent staff, which are less relevant to the dynamic financial considerations of individual projects. Therefore, the focus on project costs enables contractors and subcontractors to understand and manage the financial aspects critical to project success.