The owner requests changes that will cost the contractor in labor and materials, and the contractor aims to maintain a certain profit margin. What should be the adjusted contract price for the change order?

In the context of change orders where the owner requests modifications that incur additional labor and material costs for the contractor, determining the adjusted contract price is essential for ensuring that the contractor maintains a certain profit margin.

For the scenario presented, if the changes requested involve an increase in costs rather than a decrease, the price adjustment should reflect those increased expenses. In this case, the adjusted contract price should correctly reflect an increase based on the total of the projected labor and materials plus any desired profit margin.

The answer that indicates a decrease does not align with the situation described, as it suggests that the contractor would be reducing their income despite incurring additional costs. Thus, the adjusted contract price for the change order should accurately represent the total cost incurred by the contractor plus the markup necessary to achieve the desired profit margin, which is more consistent with an increase rather than a decrease.

The correct adjustment would ensure that all parties are fairly compensated and that the contractor's financial interests are preserved while accommodating the owner's requests for changes.