A Newberry startup bids a project at $186,000 with estimated cost of $148,800. What gross profit dollars should the owner expect?
Correct Answer
A) $37,200
Gross profit dollars equal bid price less estimated cost.
Why This Is the Correct Answer
Gross profit dollars equal bid price less estimated cost.
Why the Other Options Are Wrong
Option B: $334,800 license setup record
$334,800 license setup record is above the supported result for startup pricing control; it likely adds an unsupported amount or compares the wrong financial base.
Option C: $148,800 business audit note
$148,800 business audit note is above the supported result for startup pricing control; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $18,600 insurance evidence file
$18,600 insurance evidence file is below the supported result for startup pricing control; it likely uses the wrong base, period, or account bucket.
Memory Technique
Owner Reviews money test: bucket before math for startup pricing.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Builder's Guide to Accounting, Gross profit and pricing; verify the startup duty, registration, or financial setup before answering.
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