Contracts & ExecutionQuestion 196 of 1605
A contractor marks up direct costs by 35%. If the markup amount on a job is $14,000, what were the direct costs?
a.$40,000
b.$49,000
c.$4,900
d.$54,000
Explanation
Markup amount equals direct cost times the markup rate: $14,000 = cost x 0.35, so cost = $14,000 / 0.35 = $40,000. The selling price would be $54,000.
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