Johnson Technology specializes in graphic design and video production.In October 2014,the company incurred the following costs for providing services to one of its clients.
-Johnson Technology's contract with the client discloses 20% profit margin on the cost incurred.Determine the total amount to be received by the company from its client.
A)$3,500
B)$3,860
C)$4,200
D)$2,800

Question

Johnson Technology specializes in graphic design and video production.In October 2014,the company incurred the following costs for providing services to one of its clients.  
-Johnson Technology's contract with the client discloses 20% profit margin on the cost incurred.Determine the total amount to be received by the company from its client.
A)$3,500 
B)$3,860 
C)$4,200 
D)$2,800

Quizplus · Accepted Answer

The total amount received by the company includes both the cost incurred and the profit margin. If the profit margin is 20% of the cost, then the total amount received is 120% of the cost. Let's denote the cost as C. The equation to find the total amount (T) received is T = C + 0.20C = 1.20C. To find the specific numbers, we need to reverse-engineer the options given. Option C, $4,200, when divided by 1.20, gives $3,500, which would be the cost, making the profit $700 (20% of $3,500). This fits the criteria given, so the total amount received by the company is indeed $4,200.

Johnson Technology Specializes in Graphic Design and Video Production