Formulas Flashcards
Break-even rate = ?
overhead rate + 1.0
Profit multiplier = ?
Projected profit / Projected direct labor
Projected profit = ?
Project Profit Percent x Projected net operating revenue (NOR)
Net multiplier = ?
Break-even rate + Profit multiplier
Utilization rate = ?
direct labor / total labor
WTF does direct labor mean?
This amount represents the cost of their time spent on tasks that can be billed to clients, helping generate revenue for the firm.
Hourly rate = ?
total labor / 2,080 hours per year
WTF does total labor mean?
total labor refers to the entire cost of all hours worked by employees, including both direct labor (billable hours) and indirect labor (non-billable hours) like time spent on administrative tasks, training, or business development.
AKA DIRECT LABOR / UTILIZATION RATE
Employee’s Billing Rate = ?
Hourly rate x Net Multiplier
Net operating revenue / total direct labor = ?
= net multiplier
