How is the DMC allocated for the power plant in terms of cost distribution?

The allocation of DMC (Direct Material Costs) in the context of a power plant reflects how these costs are distributed between labor and materials. In this case, stating that 20% of the DMC is attributed to labor and 80% to material emphasizes the significant role that material costs play in the overall project expenses.

Power plants typically have high material costs due to the need for various essential components, such as turbines, generators, boilers, and other equipment that are necessary for their operation. This distribution aligns with industry standards where material costs often outweigh labor costs in large-scale engineering and construction projects.

The decision to allocate 80% of DMC to materials indicates a strategic focus on sourcing high-quality materials to ensure durability and efficiency, while the lower allocation to labor recognizes that many processes in modern power plants can be automated or done with minimal labor input. This reflects contemporary practices where capital investment in technology reduces labor intensity, thus leading to a higher proportion of costs being attributable to materials.