A General Contractor is planning a commercial building project valued at $2.5 million. The building permit fee is calculated at $8.50 per $1,000 of construction value. What is the total permit fee?
Correct Answer
A) $21,250
The permit fee is calculated as: $2,500,000 ÷ $1,000 = 2,500 units × $8.50 = $21,250. This represents the total building permit fee for the project.
Why This Is the Correct Answer
The correct answer is A) $21,250. To calculate permit fees based on construction value, you divide the total project value by $1,000 to determine the number of fee units, then multiply by the per-unit rate. With a $2.5 million project value divided by $1,000 equals 2,500 units, and 2,500 units × $8.50 per unit equals $21,250. This straightforward calculation method is standard for permit fee structures in Florida.
Why the Other Options Are Wrong
Option B: $18,750
This answer of $18,750 would result from incorrectly calculating 2,500 × $7.50 instead of $8.50, suggesting an error in the per-unit rate used in the calculation.
Option C: $20,000
This answer of $20,000 appears to round the calculation incorrectly or use an approximate rate, possibly calculating 2,500 × $8.00 instead of the correct $8.50 rate.
Option D: $25,000
This answer of $25,000 would result from using $10.00 per $1,000 instead of the given $8.50 rate, representing an error in applying the correct fee schedule.
Memory Technique
Remember 'Divide by thousands, multiply by rate' - always convert the project value to thousands first, then apply the per-thousand rate
Reference Hint
Florida Building Code Chapter 1 - Scope and Administration, Section 109 - Fees, or local jurisdiction fee schedules
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