Overhead rate is defined as non-billable expenses per dollar spent on staff salaries for billable work.

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Multiple Choice

Overhead rate is defined as non-billable expenses per dollar spent on staff salaries for billable work.

Explanation:
Overhead rate is the amount of non-billable expenses incurred for each dollar spent on staff salaries for billable work. This is calculated by dividing non-billable expenses by the direct labor cost (the salaries for billable staff). An overhead rate of 1.5 means you have $1.50 in non-billable expenses for every $1.00 spent on billable staff salaries. For example, if billable salaries total $100,000, overhead would be $150,000, making the total cost $250,000. The other numbers would represent different ratios and don’t match the definition. The correct value is 1.5.

Overhead rate is the amount of non-billable expenses incurred for each dollar spent on staff salaries for billable work. This is calculated by dividing non-billable expenses by the direct labor cost (the salaries for billable staff). An overhead rate of 1.5 means you have $1.50 in non-billable expenses for every $1.00 spent on billable staff salaries. For example, if billable salaries total $100,000, overhead would be $150,000, making the total cost $250,000. The other numbers would represent different ratios and don’t match the definition. The correct value is 1.5.

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