Planning & EstimatingQuestion 494 of 700
Direct costs on a job are $12,000 in materials and $8,000 in labor. If you add 15 percent for overhead and profit, what is the total bid price?
a.$21,200
b.$22,000
c.$23,000
d.$26,000
Explanation
Direct cost subtotal = $12,000 + $8,000 = $20,000. Overhead and profit = 15 percent of $20,000 = $3,000. Total bid = $20,000 + $3,000 = $23,000. Option b adds only labor markup. Option d applies 30 percent. Markup is applied to the combined direct cost base, not to labor alone.
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