Business FinancesQuestion 300 of 1632
A contractor's direct job costs are $70,000. The overhead rate is 15% of direct costs, and the contractor wants a 10% profit on the total of direct costs plus overhead. What is the bid price?
a.$80,500
b.$87,500
c.$84,000
d.$88,550
Explanation
Direct costs $70,000 × 1.15 = $80,500 (costs plus overhead). $80,500 × 1.10 = $88,550 (adding profit). Overhead is applied first, then profit on the loaded cost.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)