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.

Question

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The Answer of 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.

Raffles Company Routinely Bids on Construction Jobs