Business FinancesQuestion 46 of 1605
A contractor prepares an estimate and adds 15% to cover overhead and 10% profit on top of that. If direct costs are $50,000, what is the bid price?
a.$57,500
b.$62,500
c.$63,250
d.$65,000
Explanation
$50,000 × 1.15 (overhead) = $57,500; $57,500 × 1.10 (profit) = $63,250. Overhead is applied first to the cost, then profit is applied to the overhead-loaded cost.
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