• Hi Michael,

I’m a bit confused, does the billing amount of each member to the client here represents the billing rate after multiplying it by the net multiplier or before? I’m assuming after multiplying by the net multiplier.

Thanks

• After multiplying

• Profit per typical 3-person team:

Support staff: \$65/hr

Total; \$265/hr

(the net multiplier is already incorporated- It's the billable rate, not the hourly salary)

265 X 0.68 = \$180.20

(the utilization rate)

\$180.20 billed per team per hour

52 weeks X 40 Hours/Week = 2,080 Hours

(very typical equation for questions; know that 2080 is the amount of hours worked in a year unless otherwise notified in the question's information. For example, there was a question that stated an employee worked 2,000 hours a year, it was not a typo; they actually only worked 2000 hours/year. Every employee is different, but it's typically 2,080 hours)

180.20 X 2,080=

\$374,816 Anualy

6 New teams so:

6 X 374,816=

\$2,248,896

To calculate 20% profit:

0.2 X 2,248,896=

449,779.20

• 