A change order has direct cost of $7,500 and markup of 25 percent on cost. What change-order price should be submitted?
Correct Answer
A) $9,375.
Markup is $7,500 x 25 percent = $1,875. Price is $7,500 + $1,875 = $9,375.
Why This Is the Correct Answer
Markup is $7,500 x 25 percent = $1,875. Price is $7,500 + $1,875 = $9,375.
Why the Other Options Are Wrong
Option B: $7,875.
$7,875. is below the supported result for change order markup; it likely omits part of the approved scope, cap, credit, or holdback.
Option C: $8,750.
$8,750. is below the supported result for change order markup; it likely omits part of the approved scope, cap, credit, or holdback.
Option D: $10,000.
$10,000. is above the supported result for change order markup; it likely adds scope or money the rule does not allow.
Memory Technique
Change Order Markup fence: markup starts at cost, margin looks back from price.
Reference Hint
Study anchor (closed-book): memorize Change order markup from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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