Owner-Furnished Material Markup Risk

To calculate the overhead recovery rate per labor hour, you divide your total monthly overhead by your monthly billable ____.

An electrical contracting business calculates its labor-hour overhead recovery rate to be $25.00. What does this specific number represent in their pricing model?

An electrical contracting business has a fixed monthly overhead of $32,000. They employ 8 electricians who each average 160 billable hours per month. If the owner adds an overhead recovery rate of $20.00 to each billable labor hour, they will successfully recover their total monthly overhead.

Analyze how different operational events impact an electrical contractor's pricing model. Match each business scenario with its direct mathematical effect on the labor-hour overhead recovery rate.

An electrical contractor realizes their current pricing model is failing to cover their fixed administrative expenses. To critically evaluate and correct their labor-hour overhead recovery rate, arrange the following necessary steps in the most logical sequence.