Application of Professional Ethics, and Business Practices - Part II Flashcards
Agreements certified by the American Institute of architects or American Society of Interior Designers impose strict regulations on the establishment of _________ ______.
project costs
An AIA/ASID agreement, explicitly states that no ______ limit of project costs can be established as a condition of the agreement unless it is ____________________________.
fixed, agreed to in writing by both parties
The only condition under which this can be established is, if the lowest bid ______________.
exceeds that limit
In this case, the designer is required to modify the drawings and specifications at _______________, as to reduce the project cost.
no additional charge
Interior designers may charge for their services based on a ______ fee or an ________ ______.
fixed, hourly rate
Hourly rate: The client agrees to pay a ____ rate for each ______ the designer spends on the project.
set, hour
Fixed fee: the client agrees to pay a specific ____ of money to the designer for a specific set of __________. Payment is usually made on a _________ basis;
How does the designer establish cost for a fixed fee?
sum, services
monthly
The designer establishes the sum of money based on cost, including salaries of employees, benefits, taxes and office overhead; reimbursable expenses are added, in addition to the fees for basic services.
Interior designers, often charge for services based on a ___________ of the project ______.
percentage
cost
This method (percentage of project cost) is best suited to projects in which the designer can accurately _____________________, as well as the probable ____ of the project.
anticipate the amount of work that will be required
cost
Percentage of project cost is not a good idea when the project is ___________________.
on a small budget
On occasion, a client may be suspicious that the designer will be encouraged to ____________________, in order to ____________________, or that the designer may lose the incentive to reduce construction and furnishings costs.
increase the cost of the project
increase the professional fees
Interior designers sometimes base their service fees on a rate per area planned or designed, or on the resale of _____________________.
wholesale furniture purchases
Rates per area (square footage) planned, or designed: calculated by multiplying the square footage of the project by a ______ rate; typically used in ___________ construction; to protect the interest of the designer, the ______ of __________ must be clearly defined.
fixed
commercial
scope of services
Reselling wholesale furniture purchases at retail prices: in this scenario, the designer purchases furniture, fixtures, and other items at a ______ _________, and then sells them to the client at ______ price. The difference in price amounts to the ____________ ______ of the designer.
trade discount
retail
professional fees
Which method is not recommended and is only used sparingly?
Reselling wholesale furniture purchases at retail prices
Occasionally, an interior designer uses the multiple of ______ ___________ expense to calculate _____.
direct personnel
fees
In this method, normal personnel expenses are calculated by multiplying the direct hourly salary of employees by some ______ representative of _____, ______ _______, __________, and other expenses.
factor
taxes, sick leave, healthcare
The resulting hourly amount has been increased by another multiplier (usually between ____ and ____) that includes provisions for _________ and ______.
2.75 and 3
overhead and profit
This method of calculating fees is only used on ______ _____ projects, and by __________ designers.
large scale
established
The multiple of _______ ________ expense is similar to the method of “multiple of direct personal expense”, except that the multiplier is _______ to account for employee _________, as well as overhead.
direct salary
larger
benefits
Also, ______ is based on direct hourly wage. The hourly method is preferred by designers because it ensures that every hour will be _____ ____ and ___________.
profit
paid for and profitable
The Multiple of Direct Salary Expense method also protects the designer in cases where the client continually __________________ or _______ the completion of the job and some other way.
changes his or her mind
delays
Clients, on the other hand, may be uncomfortable with _______________ of the hourly system, and may seek to impose a _________ _________ upon initiation of the contract.
the open-ended nature
maximum payment
There is a specific code of ______ governing the conduct of interior designers.
ethics