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Billing
Rate Methods
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Direct
Personnel Expense (DPE) Vs Direct Salary Expense (Raw Labor)
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•To calculate the Benefits Factor of 0.396,
divide
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Total
Benefits of $1,083,146 by
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Total
Wages of $2,734,692 for Hours Worked
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•To calculate the Labor Benefits Factor,
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Add
Labor of 1.00 plus Benefits Factor of 0.396 = 1.396
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•To calculate Multiple of Direct Personnel
Expense (DPE) of 2.32,
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Divide
Net Multiplier from Profit Plan of 3.241 by
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Labor
Benefits Factor of 1.396 (calculated above)
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Raw
labor of $27.43 x 1.396 = $38.29 Direct Personnel Expense
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Direct
Personnel Expense of $38.29 x 2.32 = $88.88 Billing Rate
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Direct
Salary Expense $27.43 x Net Multiplier 3.241= $88.88 Billing Rate
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