@coachchristinaassmann On PART3 - question 2, why was the Utilization rate of 90% not applied to the billing rate?
@abamidele, thanks for following up on this.
This scenario pertained to calculating an hourly additional service. This means that the exact billable hours are factored to arrive at the fee to be billed to the client. The utilization rate is not relevant for this calculation. While you might assume that the employees are not 100 % productive when working on those tasks, this will not be passed onto the client.
However, when looking at a project that’s fully staffed, you will factor the utilization rate, because you cannot assume that anyone will be a full 100 % billable. You will always have time that cannot be billed to a project in your work week. You might have office internal meetings, will need to do your time sheets, do administrative tasks, etc.
I hope this helps!