Procedure: 403.A-Calculating Rates for Revenue Producing Activities (RPA)
Appendix 1 Schedule III
Billable Hours Ratio
Employee |
1 |
2 |
3 |
4 |
5 |
|||
| Down | Dept. | Maint | Total | |||||
DEPT. A |
||||||||
A |
2,080 |
176 |
1,904 |
35 |
92 |
294 |
421 |
1,483 |
B |
2,080 |
176 |
1,904 |
40 |
121 |
238 |
399 |
1,505 |
C |
2,080 |
208 |
1,872 |
55 |
65 |
204 |
324 |
1,548 |
6,240 |
560 |
5,680 |
130 |
278 |
736 |
1,144 |
4,536 |
|
Billable Hrs. Ratio (Col. 5/Col. 3) = 80%
* All hours for Base Period.
Employee |
1 |
2 |
3 |
4 |
5 |
|||
| Down | Dept. | Maint | Total | |||||
DEPT. B |
||||||||
D |
2,080 |
176 |
1,904 |
45 |
212 |
94 |
351 |
1,533 |
E |
2,080 |
216 |
1,864 |
58 |
307 |
152 |
517 |
1,347 |
F |
2,080 |
188 |
1,892 |
52 |
442 |
118 |
612 |
1,280 |
G |
1,040 |
92 |
948 |
27 |
98 |
54 |
179 |
769 |
7,280 |
672 |
6,608 |
182 |
1,059 |
418 |
1,659 |
4,949 |
|
Billable Hrs. Ratio (Col. 5/Col. 3) = 75%
*All hours for Base Period.
Do not include Leave Without Pay Hours on this schedule, as that would distort the ratio.
Schedules II and IV use fringe benefit hours earned because those figures are for calculating total costs to be recovered. Schedule III uses fringe benefit hours used to calculate a viable ratio. This ratio is used to estimate the number of actual billable (base) hours there will be in the current year for which the rates are to be in effect (Schedule IV). These are the number of hours over which total costs must be spread to recover all costs.
Notes to Schedule III
All hours are for a definite, measurable base period. Care should be taken to use actual historical data for a reasonable representative period of time, e.g., at least six months duration.
It is extremely important to maintain time and effort records to provide documented support for the basis for billable hours -- especially if any customer is paying for services with federal money. In the initial year of operations such records may not be available, so estimates must be used. After the initial year, external auditors may disallow charges which are not substantiated with adequate cost records.
Column 1
"Total Hours" in this example is 2,080 hours for a one year period. Employee "G" is half-time; therefore, his total hours figure is 1,040.Column 2
"Fringe Benefits" hours are the actual hours taken off during the base period by each individual employee for sick leave, vacation, and holidays. Employee "A" took nine days of vacation (72 hrs.) used all available holiday time (100 hours), and took 4 hours of sick leave (72 + 100 + 4 = 176 fringe benefit hours).If you know there will be a big difference in fringe benefit hours that will be used in the current year compared to the previous year, (e.g. more or less vacation planned) add or subtract this from the previous year’s figures. Always document the reason for the difference.
Column 3
Actual Hours Worked - column 1 less Column 2 (Total Hours less Fringe Benefit Hours Used).Column 4
The "unbillable" categories are such hours as departmental meetings, "down" time, shop or "clean-up" time, and any other non-billable portions of Actual Hours Worked (Column 3).Column 5
Billable hours are the result of subtracting the Column 4 sub-total from Column 3 (Actual Hours Worked minus Unbillable Hours).Billable Hours Ratio
(Separately calculated for each sub-department) is derived by dividing the Column 5 total by the Column 3 total (Billable Hours by Actual Hours Worked). It is expressed as a percent.
Procedure: 403.A-Calculating Rates for Revenue Producing Activities (RPA)