Business FinancesQuestion 1105 of 1605
A contractor's price is $20,000 and direct cost is $16,000. What is the markup percentage on cost?
a.16%
b.80%
c.20%
d.25%
Explanation
Markup = profit / cost. Profit = $20,000 - $16,000 = $4,000. Markup = $4,000 / $16,000 = 0.25 = 25%. (The margin on price would be $4,000 / $20,000 = 20%.)
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)