Planned multiplier

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Yuan Ma

August 25, 2022 03:47

On AHPP pg 636, the Planned multiplier is defined as 

"Planned multiplier: net service revenue / planned cost"

In this equation, from my understanding, the planned cost is the planned direct labor cost. Therefore, if the estimate of direct labor cost is accurate enough, the planned multiplier should be fairly close to the Net multiplier. Is this correct? 

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  Haytham Abdelrahman Abdelall August 25, 2022 06:48

  From AHPP # 630, the planned cost = raw labor cost = TDL (Total direct labor).

  You're correct in the 2nd portion, you meant if the planned hours are accurate you'll generate revenue / profit as targeted.

   

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