Procedure: 403.A-Calculating Rates for Revenue Producing Activities (RPA)
Appendix 1 Schedule IV
Direct Labor Rate
Direct Labor (Department A)
|
1 |
2 |
3 |
4 |
5 |
6 |
A |
25,000 |
2,080 |
324 |
1,756 |
14.24 |
25,005.44 |
B |
22,500 |
2,080 |
284 |
1,796 |
12.53 |
22,503.88 |
C |
20,000 |
2,080 |
284 |
1,796 |
11.14 |
20,007.44 |
67,500 |
6,240 |
892 |
5,348 |
12.62 |
67,491.76 |
|
Billable Hours Ratio (From Schedule III) |
80% |
|||||
67,500 |
Base Hours |
4,278 |
*15.78 |
67,506.84 |
||
* Rate per Billable Hour
Direct Labor (Department B)
|
1 |
2 |
3 |
4 |
5 |
6 |
D |
22,800 |
2,080 |
284 |
1,796 |
12.69 |
22,791.24 |
E |
16,400 |
2,080 |
324 |
1,756 |
9.34 |
16,401.04 |
F |
13,600 |
2,080 |
284 |
1,796 |
7.57 |
13,595.72 |
G |
8,400 |
1,040 |
142 |
898 |
9.35 |
8,396.30 |
61,200 |
7,280 |
1,034 |
6,246 |
9.80 |
61,210.80 |
|
Billable Hours Ratio (From Schedule III) |
75% |
|||||
61,200 |
Base Hours |
4,685 |
*13.06 |
61,186.10 |
||
* Rate per Billable Hour
| Base Hours for Dept. A | = | 4,278 | ||
| Base Hours for Dept. B | = | 4,685 | ||
| Total Base Hours | = | 8,963 | ||
Notes to Schedule IV
Column 1
Annual Salary - Use current annual salary for each employee. When employer-contributed fringe benefit costs are included in the rate, use Schedule I for calculation of total annual salaries/wages. If the rate study is for the purpose of establishing rates for a future fiscal year, use anticipated salaries if they are available, and if reasonable reliability can be attached to them. A follow-up, after the beginning of the new year, should be made.Column 2
"Total hours" normally 2,080 annually, is explained in notes to Schedule II.Column 3
Fringe Benefit Hours - Appropriate fringe benefit hour totals are entered for each employee according to the information given on Schedule II.Column 4
Assignable Hours - Column 2 less Column 3 (Total Hours less Fringe Benefit Hours).Column 5
Hourly Rate - Column 1 divided by Column 4 (Annual Salary divided by Theoretical Net Hours).(Individual rates are calculated for comparison purposes only, as a composite rate is developed later. Theoretically, if a significant variation in individual rates occurs, a composite rate would be undesirable because it would value a low-salaried employee's services at the same level as a high-salaried employee's--see Schedule IX for calculation of individual rates).
Column 6
Recovery - Column 4 multiplied by Column 5.Enter the Billable Hours Ratio percentage (from Schedule III) below Column 4 total and multiply the two figures to get base hours.
Divide Column 1 total by base hours for rate per billable hour.
Round off hourly rate. Multiply base hours by hourly rate to determine recovery. This is only an accuracy check. The result should be very close to the total of Column 1.
Procedure: 403.A-Calculating Rates for Revenue Producing Activities (RPA)