Raffles Company Routinely Bids on Construction Jobs

question 31

Multiple Choice

Raffles Company routinely bids on construction jobs.Raffles first determines the budgeted product cost of the job and then applies a markup of 50%.If a bid of $15,000 is submitted for a new job, which of the following is true?

• A) Budgeted product cost is $15,000.
• B) $5,000 is pure profit.
• C) All costs pertaining to the job total $15,000.
• D) $5,000 includes fixed overhead, selling and administrative expense, and profit.
• E) $5,000 includes selling and administrative expense, and profit.

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