A reimbursable expense is $6,400 and the allowed markup is 10 percent. What amount should be billed?
Correct Answer
A) $7,040.
Markup is $6,400 x 10 percent = $640. Billing amount is $6,400 + $640 = $7,040.
Why This Is the Correct Answer
Markup is $6,400 x 10 percent = $640. Billing amount is $6,400 + $640 = $7,040.
Why the Other Options Are Wrong
Option B: $6,400.
$6,400 leaves out the 640 from the first step. The correct calculation is 6,400 x 0.10 = 640; 6,400 + 640 = 7,040.
Option C: $5,760.
$5,760 subtracts the 640 from the first step instead of adding it. The correct calculation is 6,400 x 0.10 = 640; 6,400 + 640 = 7,040.
Option D: $640.
$640 stops at the first result and never finishes the calculation. The correct calculation is 6,400 x 0.10 = 640; 6,400 + 640 = 7,040.
Reference Hint
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