Exercise 9-2 Computing Profit or Loss on a Bid

Sebastian and Whitley, plumbers, successfully bid $30,000 for the plumbing work on a new luxury home. Total direct labor cost on the job was $9,500, other direct costs were $2,500, and overhead is charged to jobs at 150% of direct labor cost.

Round your answers to one decimal place, if necessary.

1. Compute the profit or loss on the job in (a) dollars and (b) as a percentage of the bid price.

a. Profit or loss (dollars)	$	(IT IS NOT $26,250)
b. Profit or loss (percentage)		% 12.5

2. Express labor plus overhead as a percentage of total costs. % (IT IS NOT 90.48%)