Utah Contractor Practice Exam 2025 – All-In-One Guide to Master Your Contractor Exam Success!

To determine the selling price based on direct costs, overhead, and profit, you can use the following formula:

Selling Price = Direct Costs + Overhead + Profit

First, calculate the overhead:

Overhead = Direct Costs × Overhead Rate

Overhead = $37,000 × 12%

Overhead = $4,440

Next, calculate the profit:

Profit = Direct Costs × Profit Rate

Profit = $37,000 × 5%

Profit = $1,850

Now, add the direct costs, overhead, and profit together to find the selling price:

Selling Price = Direct Costs + Overhead + Profit

Selling Price = $37,000 + $4,440 + $1,850

Selling Price = $43,290

This calculation seems to indicate a potential discrepancy with the provided options. Upon reviewing typical rounding and calculation practices, options often reflect assumptions made during the calculation process, such as how profit may be considered on a total that includes overhead.

If the profit is calculated on the total of direct costs and overhead prior to the final selling price, the calculation would change slightly:

Total Costs (Direct + Overhead) = $37,000 + $4,440 = $41,440