A contractor team of three consultants is bidding on a project. The senior consultant charges $175.00/hour and the other two consultants charge $130.00/hour. The senior consultant estimates that she will spend 120 hours on the project, and the other consultants estimate that they will split 350 hours between them. The team adds 85% to their estimated labor costs to cover overhead and achieve their target profit margin. What is the total cost that the team bids for the project

Total cost of project  $123,025  

Explanation:

The total cost of the project would be the sum of the labour cost of the three consultants and the overhead charged to the project.

So, we can compute the total cost of project as follows:

Labour cost                                                    $

Senior consultant          (175× 120)  =           21,000

Other consultants         (130× 350)  =         45,500    

Total labour cost                                            66,500

Overhead        (85%× 66,500)                       56,525                      

Total cost of project                                     123,025                      

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