Which of the following describes what Total Labor Multiplier (TLM) measures?

• A. The ratio of total labor hours to total output
• B. The magnitude of indirect costs per dollar of direct labor
• C. The average direct labor cost per unit
• D. The total project duration multiplier

Answer: (B)

Total Labor Multiplier measures how much indirect or overhead costs grow in relation to direct labor spending. It expresses the magnitude of indirect costs per dollar of direct labor, so you can estimate total labor-related costs by applying this multiplier to the direct labor cost. For example, if the TLM is 0.25, every dollar spent on direct labor adds 25 cents of indirect costs like supervision, project management, site overhead, and other labor-related support. This concept helps budgeting and cost planning by capturing the overhead that accompanies labor. The other options describe different ideas—one reflects the relation between labor hours and output (productivity), another is the average direct labor cost per unit, and the last is a multiplier tied to project duration rather than overhead per direct labor dollar.