sharris

"To follow up on the original question, holidays, annual leave, sick leave, training (and perhaps other time for which the employee is paid but does not work directly on the contract effort) are factored into the rate that is established in the contract. That is why you pay, as stated by Vern, the specified rate for the actual time worked" Above, is also my understanding of how a T&M contract is priced and invoiced. However, we have a T&M contract that is losing money and I am not sure why or if I have priced it correctly. We are invoicing for all other direct costs and the issue is believed to be in the labor. We've priced as follows: 10 hoilday 15 vacation = 200 leave hours 236 days of labor = 1888 labor hours The total cost for the hours plus all benefits, payroll, overhead, G&A and profit equal a total price of $62,000. I then took the price and divided by the labor hours (1888) to calculate the hourly rate $32.84, this is the price used to invoice all hours worked. Is this not correct? WHat if the employee does not work 1888 hours and therefore I only invoice 1728 hours worked, have I lost the other costs loaded in the hourly rate? Should I've calculated the hourly price based on the average hours worked?