Expected cost is $312,000 and the contractor requires a 13% margin on selling price. What selling price is required?
Correct Answer
A) $358,621
Margin is based on selling price, so divide by one minus margin rate.
Why This Is the Correct Answer
Margin is based on selling price, so divide by one minus margin rate.
Why the Other Options Are Wrong
Option B: $352,560
$352,560 is below the supported result for margin pricing; it likely uses the wrong base, period, or account bucket.
Option C: $360,360
$360,360 is above the supported result for margin pricing; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $371,280
$371,280 is above the supported result for margin pricing; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Checks Negotiated money shelf: cost for markup, price for margin.
Reference Hint
Open-book path: tab Principles and Practices of Commercial Construction, 11th Edition, 2024 to Preconstruction pricing; margin on selling price; verify the quantity, Florida notice/permit rule, or field-control record before answering.
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