A South Miami startup bids a project at $312,000 with estimated cost of $237,120. What gross profit dollars should the owner expect?
Correct Answer
C) $74,880
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 A: $549,120 insurance evidence file
$549,120 insurance evidence file is above the supported result for startup pricing control; it likely adds an unsupported amount or compares the wrong financial base.
Option B: $237,120 banking setup log
$237,120 banking setup log is above the supported result for startup pricing control; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $31,200 tax registration packet
$31,200 tax registration packet is below the supported result for startup pricing control; it likely uses the wrong base, period, or account bucket.
Memory Technique
Gross and profit live in different drawers; Owner Reviews tells which opens.
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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