A contractor completes a 2,400 square foot home addition. The total project cost is $180,000. What is the required permit fee if Alabama charges $0.75 per square foot plus a base fee of $150?
Correct Answer
C) $1,950
Permit fee = (2,400 sq ft × $0.75) + $150 = $1,800 + $150 = $1,950.
Why This Is the Correct Answer
Option C ($1,950) is correct. Permit fee = (Square footage × Rate) + Base fee = (2,400 × $0.75) + $150 = $1,800 + $150 = $1,950. The fee is based on square footage, not project cost — the $180,000 project cost is a red-herring piece of information included to test whether candidates know which variable to use.
Why the Other Options Are Wrong
Option A: $1,650
$1,650 does not result from correctly applying the given formula. It may result from using an incorrect square footage figure or rate. If a student used 2,000 sq ft instead of 2,400: (2,000 × $0.75) + $150 = $1,650 — a common mistake if the square footage is misread.
Option B: $2,100
$2,100 might result from using $0.75 per sq ft without accounting for base fee, or from applying the rate to the wrong base. No standard calculation from the given figures produces $2,100.
Option D: $1,800
$1,800 is the square footage component alone (2,400 × $0.75 = $1,800) without adding the $150 base fee. This is the most likely error — completing the multiplication step but forgetting to add the fixed base fee.
Memory Technique
Permit fee = 'Rate × Size + Base.' Always identify: What is the rate applied to? (Square footage here, not cost.) Then add any fixed base fee on top. Think of it like a taxi ride: the meter rate × distance, plus a flat pickup fee.
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