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Cost-Based Pricing by Darrell J. Oyer

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CHAPTER 2

Direct-Labor Dollars

This chapter provides guidance on the estimating and pricing of direct-labor costs.1 This guidance addresses: (1) direct-labor hours, (2) direct-labor rates, and (3) other considerations in estimating direct-labor costs.

DIRECT-LABOR HOURS

The first step in estimating direct-labor costs is to estimate direct-labor hours. The source of information for the estimated hours varies according to the nature of the solicitation or request for proposal. For manufacturing and services, a solicitation might provide a statement of work that must be analyzed to estimate the number of direct-labor hours required. A statement of ...

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