Project Budget – Bottom Up

Slide28

  • In this model, the fee is based on the desired scope of services and the total estimated hours to complete the tasks.
  • Multiply the estimated hours by the profit plan average direct labor rate to get the total direct labor for the project.
  • Multiply the direct labor times the overhead rate to determine the overhead budget for the project.
  • Multiply the direct labor times the profit plan profit multiplier to calculate the profit.
  • Add direct labor plus overhead plus profit to get net fee.
  • Add direct consultant lump sum fee and other estimated direct expense to the net fee.
  • Make an estimate for contingencies to add to the fee.

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