PCM 9.5.2021 Questions Follow Up

Hello! Here’s a quick follow up on some of the questions from the practice management workshop.

How does the ARE want you to round?

Based on the examples provided in the ARE handbook, I believe the question will specify what decimal point they want you to round to. You should follow standard rounding practices when rounding, for example: To round a number to the nearest tenth , look at the next place value to the right (the hundredths). If it’s 4 or less, just remove all the digits to the right. If it’s 5 or greater, add 1 to the digit in the tenths place, and then remove all the digits to the right.

Any whiteboard tips to save time?

My apologies for the confusion during the workshop on the whiteboard vs. scratch paper discussion. The whiteboard function was added after I took the exams and I didn’t realize the change meant no scrap paper. Please see this link for a more in depth explanation of the whiteboard function:

Since I don’t have experience actually using this function, if any of you have recently tested and have advice please add your tips as well!

Further background on Net Multiplier?

During the workshop we discussed how to find the net multiplier but I wanted to provide further confirmation on what it is used for. The net multiplier is used to find the hourly billing rates needed to meet the profit plan. So you would multiply your employees hourly rate (which is based on their salary) by the net multiplier to find what rate you should use for that employee when billing the client. I found this information in The Architecture Students Handbook for Professional Practice. I used the 15th edition and found this breakdown on page 193. I really recommended this as a reference for this exam!

We also discussed what that net multiplier number means for the firm and the handbook gives this example “A net multiplier of 3.0, for example, indicates that each $1.00 of DSE
is generating $3.00 of revenue for the firm…”

This link provides some further information on most of the calculations we discussed in yesterday’s lesson:

I recommend taking a look at it for further clarification but will also provide the information it gave on net multipliers: “The net multiplier represents the actual revenue generated by the architecture or engineering firm, expressed as a percentage (or multiple) of total direct labor. If the net multiplier is greater than the break-even rate, the firm is earning a profit. If it is less than the break-even rate, the firm is losing money.”

Hope this helped!

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