For question 5. We are provided the net multipler of 3.0. Why do we not divide it with the maximum hourly rate obtained after the last step: Question 16 is similar and we are dividing the total hourly rate with the net multipler. Please explain the difference between question 5 and 16.
Answer:
Correct.
First, find the total fee available for the designer’s labor by subtracting the fee spent on the principal’s and project manager’s time:
- $14,000 – ($225 per hour x 4 hours + $150 per hour x 10 hours) = $11,600
Then, divide the remaining fee by the estimated number of hours to be spent by the designer:
- $11,600 / 120 hours = $96.67