Florida General Contractor Practice Exam

What is the gross profit margin of a construction project with a contract amount of 130,000, cost to date of 99,970 and cost to complete of 11,760?

1. 23.06%

2. 27.07%

3. 19.67%

4. 16.15%

The correct answer is: 27.07%

To find the gross profit margin of a construction project, you first need to calculate the total cost and then determine the gross profit. The gross profit margin is then expressed as a percentage of the contract amount. 1. **Determine Total Costs**: The total costs of the project can be calculated by adding the cost to date and the cost to complete. Here, the cost to date is $99,970 and the cost to complete is $11,760, so: \[ \text{Total Costs} = \text{Cost to Date} + \text{Cost to Complete} = 99,970 + 11,760 = 111,730 \] 2. **Calculate Gross Profit**: The gross profit is calculated by subtracting the total costs from the contract amount. The contract amount is $130,000: \[ \text{Gross Profit} = \text{Contract Amount} - \text{Total Costs} = 130,000 - 111,730 = 18,270 \] 3. **Calculate Gross Profit Margin**: The gross profit margin is found by dividing the gross profit by the contract amount and then multiplying by 100 to convert it to a