The Federal government (and state and local governments as well)
calculate billable rate as:
Billable Rate = Wage Rate + (Approved Overhead +
Indirect Costs) Factor x (Wage Rate)
Given the following business costs for the previous year
submitted for review and approval to a Federal agency:
Expense
Cost
Direct Labor
$200,000
Vacation pay, profit sharing, health insurance, sick pay
$140,000
Advertising Labor
$17,000
Office Supplies
$25,000
Insurance
$35,000
Rent
$40,000
Entertainment
$14,000
Travel (after required adjustments)
$22,000
Taxes (after...