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What is a good rate? What is a really really bad rate?

Awesome, thanks!

For #10 I don’t understand why “b” could not be an option as well?

There are a few ways to do this, and every firm is different. Some allocate a certain number of hours/week for training or non-project work, some try to keep meetings short, or allow employees to bill meeting time to clients…just depends on the firm. I think it all comes down to management and efficiency of the firm/project

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I have the same question. Why is “b” not the right answer?

is the test going to intentionally give us information to confuse us. There are so many different financial formulas and I’m mixing them all up

i see this question alot: to reduce the overhead rate, the recommendation could be to move offices. however, the cost of moving is also quite high. what do you think?

A ‘good’ utilization rate is 85-90%, a ‘bad’ utilization rate might be something under 50%. Unless that person is working on a specific non-client project for the firm, this might mean the employee isn’t working on projects more than 50% of the time.

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usually decimal. at least for the exam

Thanks guys!!

I think that could work, but it’s like many other things; you need to weigh the initial cost of moving with the long-term effect of lower rent. Eventually the costs will even out, but which is more important?

I never win anything YAY!!!


I wouldn’t say ‘intentionally’, but there are a lot of different formulas and those can get tricky. Keep practicing and quizzing yourself on when to use which equation.

Thanks Paul & Marc for being here! and to everyone! have fun with the studies!

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Hi, Can we invite people who are not members to these virtual tests and like to study on their own time?

Congrats! We’ll be in touch shortly! Have a great weekend & good luck on your exam on Monday!

@MargaretYK; I think the reason ‘b’ is incorrect is because of the phrasing. The words ‘too much’ give me a red flag, because we don’t know what ‘too much’ means. A is the better answer because we know rent is factored into the overhead rate, and that’s something that would directly affect an increased rate.

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Tricky! “Too much” tricky :wink:

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You’ll probably hear this a lot, but try to understand the concepts. (direct and indirect labor, overhead rate, utilization rate and so on). The reason is that in the questions where you need to calculate how many hours Joe has left to work on the museum in schematic design phase, for instance, you want to know what the relevant numbers are and what numbers aren’t relevant. As people have often said that there is sometimes more information provided in the question than you need for answering the question. So do a “check” while you near the end of a calculation to see “does this make (conceptual) sense”. They aren’t intentionally confusing us, although it comes across that way. They are making sure that we know what these concepts mean, so our firm can stay financially afloat.

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Thanks for the advice @Hans-Christian - I think I have a grasp of the concepts, but I do get thrown really easily with the way things are worded. Good idea for the “check” on whether or not the calculation makes sense.

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