10 Questions
What is the purpose of comparing the percentage of the total fee allocated to project consultants to industry guidelines?
To ensure the project consultants are compensated fairly and reasonably.
Why should project-related, non-reimbursable expenses be identified during the fee-setting process?
To establish a more accurate net operating revenue and net profit.
How does identifying unit costs for non-reimbursable expenses contribute to managing project workload?
By increasing the direct hours utilization in projects.
What is the potential negative impact of charging hours in excess of those budgeted or allocated to project-related activities?
Consuming profit to cover additional hours
How are overtime hours, which are charged to project-related activities but have no cost related to them, recorded?
As direct labor expense with a zero-cost impact
What might be a reason for a business decision to spend hours to 'catch up' with the project schedule?
To establish reliable historical data
What is a recommended step for firms to take before the start of the coming year?
Establishing performance goals
Which aspect of financial performance is used to develop a competitive hourly billing rate for each member of the firm?
Projected net billing and revenue
What is important for firms to track in order to be as efficient and effective as possible?
Daily project activities
Which factor plays a role in determining the break-even rates for a firm?
Overhead expense
Test your knowledge on project workload, direct hours utilization rate, and reasons for deviation from targeted utilization rates. Understand the potential impact of excessive direct hours on project activities.
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