A T&M material ticket includes $9,600 of approved materials. The contract allows 8 percent sales tax and 10 percent markup after tax. What material amount should be billed?
Correct Answer
D) $11,405
Material with tax is $9,600 x 1.08 = $10,368. Applying 10% markup after tax gives $10,368 x 1.10 = $11,404.80, or about $11,405. Other choices omit tax, use simple 20%, or use an unsupported rounded amount.
Why This Is the Correct Answer
Material with tax is $9,600 x 1.08 = $10,368. Applying 10% markup after tax gives $10,368 x 1.10 = $11,404.80, or about $11,405. Other choices omit tax, use simple 20%, or use an unsupported rounded amount.
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