A contractor is building a 2,500 square foot single-family residence. The building permit fee is calculated at $8.50 per $1,000 of construction value. If the construction value is $375,000, what is the total building permit fee?
Correct Answer
A) $3,187.50
The calculation is: $375,000 ÷ $1,000 = 375 units. 375 × $8.50 = $3,187.50. This represents the standard method for calculating permit fees based on construction value.
Why This Is the Correct Answer
The correct answer is A) $3,187.50 because permit fees are calculated by dividing the total construction value by $1,000 to determine the number of fee units, then multiplying by the per-unit rate. With a construction value of $375,000 divided by $1,000, we get 375 units. Multiplying 375 units by $8.50 per unit equals $3,187.50.
Why the Other Options Are Wrong
Option B: $3,312.50
This answer of $3,525.00 would result from calculating approximately 415 units, which is significantly higher than the correct 375 units derived from the $375,000 construction value.
Option C: $3,525.00
This answer of $2,975.00 would result from incorrectly calculating 350 units instead of 375 units, possibly from a mathematical error in the division step.
Memory Technique
Remember 'Divide then Multiply' - always divide the construction value by 1,000 first to get your units, then multiply by the rate. Think 'D before M' like 'Dawn before Morning.'
Reference Hint
Florida Building Code Chapter 1 - Scope and Administration, Section 109 - Fees, or local jurisdiction fee schedules
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