A contractor's job had estimated direct costs of $40,000 but actual costs of $46,000. He bid a fixed price of $50,000. What was his actual gross profit?

Giải thích

Actual gross profit is the fixed price less the actual cost: $50,000 - $46,000 = $4,000. $10,000 is the estimated gross profit, $50,000 - $40,000, which the overrun destroyed. $6,000 is the overrun itself, the gap between estimate and actual cost, not a profit. $14,000 comes from adding the overrun to the estimated profit instead of subtracting it.