Letter of Agreement Assignment
Fee Estimating Assignment
1. Hourly Rate Method (Calculating billing rate using DPE)
Direct Personnel Expense and Fee Multiple: Total annual salaries that I pay myself as an Interior Designer (Based on my hourly rate worth $26/hour and if I work 1929 hours per year) $50,000 Benefits and Costs (Taxes, health insurance, retirement contribution, vocation, memberships and CEUs): $20,000 Overhead Expenses: $12,000
Total Expenses: $82,000
Total Profit Goal (20% of revenue) $20,500
Total Net Revenue $102,000
Direct Labor (70% of Total Salary) $35,000
If I work 1920 hours per year, my hourly rate= $50,000/1920= $26/hour Multiplier= $102,000/$35,000= 2.9 Billing Rate = $26/hour x 2.9 = $75.4/Hour
2. Flat Fee Method
Total Flat Fee = $75.4/Hr x 98 Hrs = $7389
3. Cost Per SF
Cost per SF = 7389/5000=$1.47/SF