Cost accounting for pricing in the construction sector

Abstract

The way in which cost accounting determines pricing in the field of construction in the city of Cuenca, Ecuador, has been the object of study through the mixed approach, the relational scope and the sample of 79 construction companies that applied surveys, interviews and the analysis of documentation within the framework of the project. The results show that many companies use cost information when making decisions, preparing budgets and controlling projects, although very relevant weaknesses also emerge in relation to the attribution of indirect costs, budget adjustment and the comparison of actual and budgetary costs. On the other hand, the analysis between variables using Spearman's Rho statistic reveals significant and positive relationships between cost accounting and pricing, but, above all, between the knowledge of real and indirect cost as well as expected profitability. In conclusion, cost accounting can be a necessary tool through which construction companies in Cuenca can reactivate pricing, control their available resources and achieve the expected profitability. However, the final price does not only measure internal costs but also external factors such as competition and market conditions, therefore, companies must integrate accounting information together with the analysis of the environment.