Establishing the available time for phases based on available fee example

I am trying to take as much tests as I can find. This question is from ARE 5 Practice exams.
It is not what I practiced with Black Spectacles;)
Why are they using direct labor expense to find available hours vs hourly billing rate? Are they applying multiplier BECAUSE they already took out $162,500? is this a suggestion that fringe benefits and all other cost for employee is in $162,500?) aren’t we supposed to use the billing rate to determine how many hrs is available for project? I originally ignored the 2.5 multiplier but answer states differently. Please confirm my understanding of their logic is correct… THX!!!

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@aj1- Hi there, this question and the written response is very difficult to follow. I would concentrate on your understanding of billable versus employee cost. The employee cost x 2.5 NM would cover costs such as profit and overhead. You would want to use this as the hourly rate and then divide the available dollar amount to determine base hours.

Hi @aj1 please repost your screenshots so @coachjasongolub can see what you are referencing.

Sorry for the confusion.

I am sorry Jason for not responding…

I kind of gave up and accepted the ARE5 exams logic…

I am enclosing a pdf of scan question – but… no rush ! I have my exam tomorrow at 1:00 pm…


(Attachment Binder1.pdf is missing)

I apologize for “asking question when annoyed”…And not responding when YOU had spent time on reading and figuring out 'what does she wants":slight_smile:
I had a very hard time inserting/forwarding to you the jpg of the question.
But I doesn’t really matter!
I passed the PjM exam today!
I hope to see you in next webinars