Example 2
In this example, you set up a fee billing line (billing line type F) using the LOE at labor category method for a contract for which the value in the Billing Limit field is Funded by Line and the funded fee amount is 10,000 USD. You select the Cumulative check box for the fee billing line. You generate one invoice and then generate a second invoice without changing the funded fee amount.
This table lists the accumulated hours for three labor categories for the first invoice and the associated LOE hours:
Labor Category |
Accumulated Invoice Hours for Labor Category (current invoice) |
LOE Hours for Labor Category |
Accumulated Invoice Hours (previous invoices) |
|---|---|---|---|
ADMIN |
100 |
500 |
0 |
TECH1 |
50 |
300 |
0 |
TECH2 |
75 |
200 |
0 |
The total number of LOE hours required for the three labor categories is 1000 (500 + 300 + 200). The fee amount from previous invoices is 0.00 USD.
To calculate the fee for the first invoice, the system uses this equation:
((500 / 1000 x 10,000) x ((100 + 0)/ 500)) + ((300 / 1000 x 10,000) x ((50 + 0) / 300)) + ((200 / 1000 x 10,000) x ((75 + 0) / 200)) – 0.00 USD = 2250.00 USD
This table lists the accumulated hours for the same three labor categories in the preceding table for the second invoice.
Labor Category |
Accumulated Invoice Hours for Labor Category (current invoice) |
LOE Hours for Labor Category |
Accumulated Invoice Hours (previous invoices) |
|---|---|---|---|
ADMIN |
150 |
500 |
100 |
TECH1 |
40 |
300 |
50 |
TECH2 |
80 |
200 |
75 |
Because you have not changed any of the LOE hours since the first invoice, the total number of LOE for the three labor categories is 1,000. The fee amount from the previous invoices is 2250.00 USD.
To calculate the fee for the second invoice, the system uses this equation:
((500 / 1000 x 10,000) x ((150 + 100 / 500)) + ((300 / 1000 x 10,000) x ((40 +50) / 300)) + ((200 / 1000 x 10,000) x ((80 + 75) / 200)) – 2250.00 USD = 2700.00 USD