Direct job cost is $58,500 and markup is 22 percent on cost. What bid price results?
Correct Answer
A) $71,370.
Markup is $58,500 x 22 percent = $12,870. Bid price is $71,370.
Why This Is the Correct Answer
Markup is $58,500 x 22 percent = $12,870. Bid price is $71,370.
Why the Other Options Are Wrong
Option B: $64,870.
$64,870. is below the supported result for markup on cost; it likely uses the wrong base, period, or account bucket.
Option C: $68,500.
$68,500. is below the supported result for markup on cost; it likely uses the wrong base, period, or account bucket.
Option D: $80,000.
$80,000. is above the supported result for markup on cost; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Markup On Cost fence: markup starts at cost, margin looks back from price.
Reference Hint
Study anchor (closed-book): memorize Markup on cost 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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