For example, you may have eight phases in your budget. When you have completed phase 2, should your variable expenses and labor equal 25 percent of the total? Not necessarily. The best way to break down the total project budget is on the basis of percentage-of-completion work. As long as labor represents the lion’s share of your expense, the completion phase may be defined by total hours in each phase. The labor-tied method also dictates percentage-of-completion for other expenses, even when expenses do not always follow the same pattern as labor. However, two points offset this disadvantage: First, it is highly probable that expense trends will.
