How to Calculate Labor Budget (Step by Step) | ARE 5.0 PcM

How to Calculate Labor Budget (Step by Step) | ARE 5.0 PcM

Author: Bryn Young | BYoung Design September 18, 2025 Duration: 6:52

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In this episode, we dive into a classic ARE 5.0 Practice Management (PcM) practice question on top-down budgeting. Using a real-world style scenario, we break down step by step how to calculate a project’s labor budget from construction costs, gross fee, consultant fees, and contingency.

You’ll learn:

  • How to calculate gross fee as a percentage of construction cost
  • Why consultant fees are taken from the gross fee (not the construction cost)
  • How contingency and direct expenses factor into the calculation
  • How to arrive at the final labor budget available for staffing and project phases
  • Where to find the formula in the Architect’s Handbook of Professional Practice (AHPP Table 10.4)

This breakdown is critical for the ARE 5.0 PcM exam, but it’s also directly applicable in real-world firm management when setting fees and allocating resources.

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If you're navigating the challenging path toward becoming a licensed architect, Design Create Inspire offers a companion for the journey. Host Bryn Young, a licensed architect and the founder behind ABC Club and Mind Over ARE, draws from her own experience and her work coaching others to create a resource that goes far beyond simple study tips. This podcast digs into the practical strategies for tackling the ARE 5.0, but its real strength lies in addressing the mental and logistical hurdles that come with exam preparation. You'll find episodes focused on effective study techniques, breaking down complex exam divisions, and building a sustainable study plan. More importantly, Bryn incorporates mindset tools and shares genuine insights from real coaching conversations, tackling common struggles like procrastination, maintaining motivation over the long haul, and finding a balance between exam demands and personal life. It’s a blend of tactical advice and psychological support, all aimed at helping you not just prepare for the test, but persevere through the entire licensure process. Tune in for honest discussions that acknowledge the difficulty of the endeavor while providing the clarity and encouragement needed to move forward.
Author: Language: English Episodes: 100

Design Create Inspire
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