Utilization rate is defined as the percentage of hours that are billable.

• A. 35%
• B. 80%
• C. 65% (the example)
• D. 50%

Answer: (C)

Utilization rate measures how much of the available work time is spent on billable client work. It’s calculated by dividing billable hours by total hours available, then converting to a percentage. For example, if a professional has 40 hours in a week and 26 of those hours are billed to clients, the utilization rate is 26/40 = 0.65, or 65%. That means 65% of their time is spent on billable activities while 35% goes to non-billable work like admin, meetings, or training. Different numbers of billable hours would yield different percentages (e.g., 32 billable hours would be 80%, 20 would be 50%, etc.), but the scenario given uses 26 billable hours, which gives 65%.