{"id":"fpa-billable-rate-for-target-margin-lines","audience":"fpa","category":"finance-work","track":"finance","technique":"verification","level":"intermediate","title":"Find the billable rate that gives a target margin at 75% utilization","free":false,"task":"You're setting a consulting rate for the practice lead. Write a prompt for plain text with lines starting \"Loaded cost:\", \"Cost per hour:\", \"Cost per billable hour:\", \"Rate for 20% margin:\" and \"Check:\". Show the math. The rate gives a gross margin of 20% of the rate. The Check line proves the margin on one billable hour. Under 100 words.","materialLabel":"Source material (attached to your prompt automatically)","material":"CONSULTANT RATE INPUTS\n\nBase salary: $96,000 per year\nBenefits and payroll costs: 25% of salary\nPaid hours per year: 2,000\nExpected utilization (share of paid hours that are billable): 75%\n\nTarget gross margin: 20% of the rate (so cost is 80% of the rate).\n\nNotes:\n- A previous rate card used $85 per hour, calculated by dividing salary by 2,000 hours and adding 40%, ignoring utilization.\n- Overhead such as rent and software is not included in this calculation.\n- The practice lead wants a rate that covers the consultant's own cost on the hours actually billed, plus the target margin.\n- Bonus pools are not included. The rate is for a standard engagement with no travel.\n- Utilization of 75% is the practice target for this role; the last quarter's actual was 70%, but the lead asked to use the target.","rules":[{"type":"plainText"},{"type":"maxWords","max":100}],"promptHints":[{"label":"Names the five lines","patterns":["loaded cost","cost per hour","billable hour","rate for","check"]},{"label":"Divides by utilization","patterns":["75%","utilization","0\\.75"]},{"label":"Defines margin on the rate","patterns":["0\\.80","of the rate","/ 0\\.8"]},{"label":"Asks for the math","patterns":["show the math","math"]},{"label":"Caps length","patterns":["\\d+\\s*words","under \\d+"]}],"mistakes":[{"title":"Ignoring utilization","why":"The AI uses $60 as the cost of a billable hour.","fix":"Say: \"Divide cost per hour by 75% utilization.\"","checks":["r1"]},{"title":"Marking up instead of margin","why":"The AI multiplies cost by 1.2 to get $96.","fix":"Add: \"Margin is 20% of the rate: rate = cost / 0.80.\"","checks":["r1"]},{"title":"Using the old rate card","why":"The AI starts from $85.","fix":"Add: \"Start from salary and benefits; ignore the old rate card.\"","checks":["r0"]},{"title":"No check","why":"The AI states $100 with no proof.","fix":"Add: \"Check: rate minus cost, divided by rate.\"","checks":["r2"]},{"title":"Markdown extras","why":"The AI adds bold labels, headings and a closing note.","fix":"Say: \"Plain text, no bold. Output only the lines asked for.\"","checks":["plainText"]},{"title":"Trusting the AI to count words","why":"AI is bad at counting and runs past word limits.","fix":"Ask for fewer words than the real cap and keep each part short.","checks":["maxWords"]}],"hint":"Margin on price is different from markup on cost. Spell out both divisions and ask for a proof line.","rubricLabels":["Loaded cost shows $96,000 x 1.25 = $120,000 and Cost per hour shows $120,000 / 2,000 = $60","Cost per billable hour shows $60 / 0.75 = $80 and Rate for 20% margin shows $80 / 0.80 = $100","Check shows $100 - $80 = $20 and $20 / $100 = 20%, and the 70% actual utilization and the old $85 rate are not used"]}