Business FinancesQuestion 1101 of 1632
A contractor's direct job costs are $8,000. He applies a 25% markup on cost. What is the total price he charges the customer?
a.$6,000
b.$10,666
c.$10,000
d.$8,250
Explanation
Markup is calculated on cost. $8,000 x 25% = $2,000 markup. Price = $8,000 + $2,000 = $10,000. (Note: a 25% markup is NOT the same as a 25% margin; a 25% margin would produce a price of $8,000 / 0.75 = $10,666.)
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)