Orange Remodeling Service specializes in renovating older homes. Last week the c
ID: 2485826 • Letter: O
Question
Orange Remodeling Service specializes in renovating older homes. Last week the company was asked to bid on the following remodeling job. The list of materials and labor needed to complete the job follows. SEE ATTACHED PHOTO.
Orange uses an overhead markup percentage for materials (50 percent) and for labor (60 percent). Those markups cover all operating costs. In addition, Orange expects to make at least a 30 percent profit on all jobs.
Compute the price that Orange should quote for the job.
Materials Labor $5,000 200 $4,000 2,000 Carpenter Floor specialist Painter Supervisor Helpers Total Lumber Nails/bolts Paint Glass Doors Hardware Supplies Total 1,800 3,000 500 500 1,000 $12,000 2,000 1,000 3,000 $12,000Explanation / Answer
Calculation of price that Orange should quote for the job:
Material Costs
$ 12,000
Add: Labor Costs
$ 12,000
Add: Overhead Costs =(12000*50%) +(12000*60%)=
$ 13,200
Total cost
$ 37,200
Add: Markup = 37200*30% =
$ 11,160
Price that Orange should quote for the job =
$ 48,360
Calculation of price that Orange should quote for the job:
Material Costs
$ 12,000
Add: Labor Costs
$ 12,000
Add: Overhead Costs =(12000*50%) +(12000*60%)=
$ 13,200
Total cost
$ 37,200
Add: Markup = 37200*30% =
$ 11,160
Price that Orange should quote for the job =
$ 48,360
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