A building permit application shows the construction value as $150,000. The permit fee is calculated at $8.50 per $1,000 of construction value. What is the total permit fee?
Correct Answer
C) $1,275
Permit fee = (Construction value ÷ $1,000) × Rate = ($150,000 ÷ $1,000) × $8.50 = 150 × $8.50 = $1,275. Building permit fees are typically calculated based on the total construction value.
Why This Is the Correct Answer
The correct answer is A) $1,275. This is calculated by first determining how many $1,000 increments are in the construction value ($150,000 ÷ $1,000 = 150), then multiplying by the fee rate (150 × $8.50 = $1,275). This type of calculation is standard for building permit fees in Florida, where fees are typically assessed per thousand dollars of construction value.
Why the Other Options Are Wrong
Option A: $850
Option D ($850) is significantly too low and appears to result from a major calculation error, possibly dividing the construction value incorrectly or using the wrong rate entirely.
Option B: $1,200
Option C ($1,350) is incorrect because it overestimates the fee, possibly by using a rate of $9.00 per $1,000 instead of the given $8.50 rate, or by making an error in the division step.
Option D: $1,350
Option B ($1,200) is incorrect because it appears to use an incorrect rate calculation, possibly dividing $150,000 by $125 instead of following the proper formula of dividing by $1,000 and multiplying by $8.50.
Memory Technique
Remember the formula: 'Divide by 1000, then Multiply by Rate' - use the acronym 'DMR' (Divide, Multiply, Rate) to recall the two-step process for permit fee calculations.
Reference Hint
Florida Building Code, Chapter 1 - Scope and Administration, Section on Permits and Fees, or local building department fee schedules
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