In the kitchen remodel file, a cost-plus change has $7,250 documented cost and a 12 percent fee. What total should be shown?
Correct Answer
A) $8,120.
Twelve percent of $7,250 is $870. Adding it to cost gives $8,120.
Why This Is the Correct Answer
Twelve percent of $7,250 is $870. Adding it to cost gives $8,120.
Why the Other Options Are Wrong
Option B: $7,960 total.
$7,960 total. is below the supported result for cost-plus change calculation; it likely omits part of the approved scope, cap, credit, or holdback.
Option C: $8,250 total.
$8,250 total. is above the supported result for cost-plus change calculation; it likely adds scope or money the rule does not allow.
Option D: $8,700 total.
$8,700 total. is above the supported result for cost-plus change calculation; it likely adds scope or money the rule does not allow.
Memory Technique
Checking Backup contract math: approved scope is the ruler for cost-plus change.
Reference Hint
Study anchor (closed-book): memorize Cost-plus change calculation from CSLB 2026 Law Book; CSLB Home Improvement Contracts / B&P Code Section 7159 home improvement contract requirements; know the rule or calculation trigger without relying on exam-room lookup.
More Law & Business Questions
A Fresno homeowner wants a $725 cabinet repair and trim adjustment. Which contract step best matches CA home improvement requirements?
A project has $6,500 retainage withheld. The owner releases 60 percent of retainage at substantial completion. How much cash is released?
Cash is $52,500 and monthly burn is $17,500. How many months of runway are available?
A supplier offers 1.5 percent early-pay discount on a $22,000 invoice. What is the discount?
A balance sheet lists assets of $310,000 and liabilities of $185,000. What is owner's equity?
A job is estimated to cost $135,000. What price gives a 25 percent gross margin?
A customer invoice of $4,000 has a stated late charge of 1.5 percent. What late charge is added?
A bid has direct labor of $18,000, materials of $12,500, and equipment rental of $3,500. If the contractor adds 20 percent markup on direct cost, what is the bid price?
A contractor wants a 25 percent gross margin on a job with estimated cost of $60,000. What selling price gives that margin?
A completed project sold for $150,000 and had total cost of $126,000. What gross margin percentage did the project earn?