David Owns a Small Boutique That Sells Products Created by Local

Multiple Choice

David owns a small boutique that sells products created by local vendors and artisans. He would very much like to update his store and will be hiring a contractor to complete the work. The contractor has informed him that the project will entail the following activities: Store design, 15 hours at $137 per hour; Carpet installation, 1,250 square feet at $10.80 per square foot; Fixture construction, $112 per piece with a total of 22 pieces; and SG&A expenses, 20 hours at $40.75 per hour. This estimate will also include a 26% additional markup based on the total of the estimated job costs for the entire project. A competing bid has been returned with a flat rate of $18.50 per square foot of carpet installation that would cover the whole project. Which estimate would save David the most money?

A) ABC rate, since it will cost David $4,291.00 less than the flat-billed rate
B) ABC rate, since it will cost David $605.84 less than the flat-billed rate
C) Flat-billed rate, since it will cost David $4,291.00 less than the ABC rate
D) Flat-billed rate, since it will cost David $605.84 less than the ABC rate