If a contractor estimates labor and material costs to be $2,500, what should the total bid be if overhead is 15% and profit is 5%?

To determine the correct total bid for the contractor's project, we first need to calculate the overhead and profit based on the estimated labor and material costs of $2,500.

1. Calculate overhead: Overhead is charged as a percentage of the estimated costs. For this case, the overhead is 15%.

• Overhead = $2,500 * 0.15 = $375

2. Next, we calculate profit, which is based on the initial labor and material costs plus the overhead. Therefore, the total cost before profit is:

• Total cost before profit = Labor and material costs + Overhead

• Total cost before profit = $2,500 + $375 = $2,875

3. Now, calculate the profit, which is 5% of this total cost:

• Profit = $2,875 * 0.05 = $143.75

4. Finally, we add the profit to the total cost before profit to determine the total bid:

• Total bid = Total cost before profit + Profit

• Total bid = $2,875 + $143.75 = $3,018.75

Upon re-evaluation, however, if we were to round