The direct and indirect costs estimated by a contractor for bidding a project is Rs. 160000 and Rs. 20000 respectively. If the markup applied is 10% of the bid price, the quoted price (in Rs.) of the contractor is

Explanation:

Total cost = Direct cost + Indirect cost

Total cost = 160000 + 20000 = 180000

According to question, Mark up applied is 10% of bid price.

Quoted bid price = Total Cost + (10/100 ) ×  Quoted bid price

⇒ 0.9 ×  Quoted bid price = 1,80,000

So,

Quoted price = 1,80,000/0.9 = 2,00,000

Additional Information

Indirect project Cost: Indirect project cost are those expenditures which cannot be clearly allocated to the individual activities of the project, but are assessed as a whole.

The indirect cost rises with an increase in duration. 

Direct Project Cost: These include labour cost, material cost, equipment cost etc.

Direct cost decreases with an increase in duration.