ARE Live: PcM Mock Exam 11/17/2022 - Arch Fee Calculations

can you explain why in step 4 of calculating the arch net fee, you subtracted the consultant fee from the gross fee;
you calculated the consultant fee → 25% of arch basic fee ($950,000); why not 25% of gross ($1,150,000)
but when it comes to calculating the arch net fee tho you subtracted the consultant from the arch gross fee and not from the arch basic fee.

I am confused why we are not using the same arch fee (gross or basic) to calculate these numbers, why did you switch it? I know if it wasn’t for the additional information (i.e the $200k supplemental services) it is a pretty straightforward math solution.

please explain


Hi @yaa , thanks for writing in!

The consultant’s fee is 25% of the architect’s basic fee simply because that’s what the question states. It could easily have been 25% of the architect’s total fee, or some other calculation. There’s no standard way to calculate the consultant’s fee so make sure to pay attention to the wording in the question!

We subtract the consultant’s fee from the architect’s total fee because that result represents the total amount that the architect will have to devote to the project. If we subtract it from their basic service fee only, we wouldn’t be attributing any hours towards the supplemental service, which can’t be right!

ok it makes sense, thank you for the clarification