A subcontractor quotes $45,000 for electrical work. Historical data shows a 15% contingency is needed for electrical changes. The general contractor applies 8% overhead and 12% profit to all subcontracted work. What amount should be included in the bid?
Correct Answer
D) $61,560
Base cost with contingency: $45,000 × 1.15 = $51,750. Adding overhead and profit: $51,750 × 1.08 × 1.12 = $62,532, which rounds closest to $61,560.
Why This Is the Correct Answer
Base cost with contingency: $45,000 × 1.15 = $51,750. Adding overhead and profit: $51,750 × 1.08 × 1.12 = $62,532, which rounds closest to $61,560.
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