Florida General Contractor Practice Exam

What is the gross profit from the following data: Subcontractor "A" 62,400, Contractor Income 87,560, Misc Income 26,344, Construction Materials 29,340, Sales and Overhead 19,670?

1. 26,344

2. 40,564

3. 30,000

4. 15,000

The correct answer is: 40,564

To determine the gross profit, it is essential to first understand what gross profit is. Gross profit represents the revenue remaining after deducting the costs of goods sold (COGS), primarily the direct costs associated with producing the goods or services sold by a business. In this scenario, the total revenue is found by adding together the contractor income and the miscellaneous income: - Contractor Income: $87,560 - Miscellaneous Income: $26,344 Total Revenue = $87,560 + $26,344 = $113,904. Next, the costs associated with generating this revenue must be deducted. In this context, the costs include the subcontractor payment and the construction materials used: - Subcontractor "A": $62,400 - Construction Materials: $29,340 Total Costs = $62,400 + $29,340 = $91,740. Now, to find the gross profit, we subtract the total costs from the total revenue: Gross Profit = Total Revenue - Total Costs Gross Profit = $113,904 - $91,740 = $22,164. Given the choices in the question, it looks like there may have been some confusion as the calculated answer does not match any provided option directly.