CSLB C-27 Landscaping ContractorPlanning and EstimatingEasy
A C-27 contractor is preparing a bid for a landscape project that requires the installation of 2,500 linear feet of drip irrigation line. The material cost for the drip line is $0.25 per linear foot, and the labor cost for installation is $0.35 per linear foot. If the contractor applies a 15% overhead and profit margin to the total direct costs, what is the estimated bid price for the drip irrigation line installation?
- A$1,375.00
- B$1,725.00
- C$1,581.25
- D$1,437.50
Show answer & explanationAnswer & explanation
Correct answer: C. $1,581.25
This question requires calculating the total direct cost by adding material and labor costs, then applying the overhead and profit margin to find the final bid price. The calculation is (2500 * ($0.25 + $0.35)) * 1.15.
Why the other options are wrong
- A. This calculation only includes the direct material cost multiplied by the margin, omitting labor.
- B. This calculation incorrectly applies the margin to only one of the direct costs or uses an incorrect direct cost total.
- D. This calculation uses an incorrect margin or miscalculates the direct costs.
Bid Price Calculation
The final price quoted to a client, calculated by summing all direct costs (materials, labor) and then adding a percentage for overhead and profit.
- Direct costs include materials and labor directly attributable to the project.
- Overhead covers indirect business expenses (e.g., office rent, utilities).
- Profit is the contractor's desired financial gain from the project.
Memory trick: Directly add, then multiply for your margin.