Business FinancesQuestion 39 of 1632
A contractor estimates a job will cost $80,000 in direct costs and wants a 25% markup on cost. What should the bid price be?
a.$95,000
b.$100,000
c.$106,667
d.$120,000
Explanation
Markup on cost means adding the markup percentage to the cost: $80,000 × 1.25 = $100,000. Markup on cost and margin on sales produce different results — always clarify which method is being used.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)