Mississippi Contractor License Exam — All Questions

A contractor's total direct cost for a job is $18,000. The contractor adds a 15% markup to cover overhead and profit. What is the bid price?

• a.$18,150
• b.$18,270
• c.$20,700✓
• d.$21,150

Markup is a percentage added on top of cost. Multiply the cost by (1 + markup): $18,000 x 1.15 = $20,700. The markup dollars are $18,000 x 0.15 = $2,700, which is added to the $18,000 cost to reach the bid price. Markup covers both company overhead and profit.

A job costs the contractor $8,000. The contractor wants a 20% gross profit MARGIN (profit as a percentage of the selling price). What must the selling price be?

• a.$9,600
• b.$10,000✓
• c.$9,800
• d.$10,400

Margin is measured against the selling price, not the cost, so you cannot simply add 20% to cost. Price = cost / (1 - margin) = $8,000 / (1 - 0.20) = $8,000 / 0.80 = $10,000. Check: profit is $2,000, and $2,000 / $10,000 = 20% margin. Adding 20% to cost ($9,600) would only give a 16.7% margin — a common and costly estimating error.

How many cubic yards of concrete are needed for a slab 27 ft long, 30 ft wide, and 4 inches thick?

• a.3.3 cubic yards
• b.6.7 cubic yards
• c.8.5 cubic yards
• d.10 cubic yards✓

First convert thickness to feet: 4 in / 12 = 0.3333 ft. Volume in cubic feet = 27 x 30 x 0.3333 = 270 cubic feet. Convert to cubic yards by dividing by 27 (there are 27 cubic feet in a cubic yard): 270 / 27 = 10 cubic yards. Getting units consistent — feet for all three dimensions — is the key step.

On a project where the exact quantities of excavation and fill are not yet known, which bidding method best protects both owner and contractor from large quantity surprises?

• a.A unit-price contract, paying a set price per unit for the actual quantity installed✓
• b.A lump-sum contract with no measurement of quantities
• c.A verbal handshake agreement
• d.A cost-plus contract with no cost records kept

Unit pricing sets a fixed price per unit (for example, per cubic yard of excavation), and the contractor is paid for the actual measured quantity. This fairly handles uncertain quantities: the owner pays only for work performed, and the contractor is protected if quantities grow. A lump sum forces the contractor to guess and gamble on the quantity, which is risky when the amount is genuinely unknown.

A wall is 40 feet long and 8 feet high. How many 4 ft x 8 ft sheets of drywall are needed to cover one side, before adding any waste factor?

• a.8 sheets
• b.10 sheets✓
• c.12 sheets
• d.16 sheets

First find the wall area: 40 ft x 8 ft = 320 square feet. Each drywall sheet covers 4 ft x 8 ft = 32 square feet. Divide: 320 / 32 = 10 sheets. In practice an estimator adds a waste factor for cuts and breakage, but the base quantity is 10 sheets. Getting area and sheet coverage in the same units is the key step.

In estimating, what is a 'quantity takeoff'?

• a.The profit removed from a bid to win the job
• b.A discount a supplier takes off the material price
• c.Measuring and counting the materials and units of work required from the plans and specifications✓
• d.The final step of loading materials onto the truck

A quantity takeoff is the process of reviewing the drawings and specifications and measuring or counting every item of material and unit of work needed — cubic yards of concrete, squares of roofing, linear feet of pipe, and so on. It is the foundation of an accurate estimate: once quantities are known, the estimator applies unit costs for labor and materials to build the total price.

Why do estimators include a 'waste factor' when calculating material quantities?

• a.To account for material lost to cuts, breakage, and normal on-site waste✓
• b.To secretly increase the company's profit margin
• c.Because building codes require ordering exactly double the materials
• d.To cover the cost of the owner's change orders

A waste factor is an added percentage that covers material that is cut off, broken, damaged, or otherwise unusable during installation — for example, off-cuts of lumber, tile, or drywall. Ordering only the exact net quantity would leave a job short. The waste percentage varies by material and complexity, but including a reasonable allowance prevents shortages and costly reorders. It is not hidden profit.

A subcontractor gives the general contractor a firm price only after the bid is submitted, but the GC relied on that quoted number in the bid. This risk is best reduced by:

• a.Never using subcontractors on any project
• b.Guessing subcontractor prices and hoping they hold
• c.Ignoring subcontractor costs entirely in the estimate
• d.Obtaining firm, written subcontractor quotes before finalizing the bid✓

Because a large share of a general contractor's price often comes from subcontractors and suppliers, the GC should secure firm written quotes before submitting the bid. Relying on verbal or last-minute numbers exposes the GC to being bound to an owner at a price that no longer matches what subs will actually charge. Locking in written quotes protects the GC's margin against bid-day surprises.

A contractor pays a carpenter a base wage of $30 per hour, but the true cost per hour with taxes, insurance, and benefits is $42. The $42 figure is called the:

• a.Retail labor rate
• b.Burdened (fully loaded) labor rate✓
• c.Prevailing wage
• d.Overtime premium

The burdened, or fully loaded, labor rate includes the base wage plus all the added costs of employing the worker — payroll taxes, workers' compensation and liability insurance, and benefits. Estimating with only the base wage badly understates cost. Using the burdened rate ensures the estimate captures what the labor actually costs the company, which is essential to bidding profitably.

One roofing 'square' equals how many square feet of roof area?

• a.10 square feet
• b.50 square feet
• c.100 square feet✓
• d.1,000 square feet

In roofing, one 'square' is a standard unit equal to 100 square feet of roof surface. If a roof measures 2,400 square feet, it is 24 squares. Roofing materials and labor are commonly priced per square, so converting the measured area into squares (area divided by 100) is a routine and frequently tested estimating step.

A contractor's annual overhead is $120,000 and they expect to do $1,000,000 in direct job costs this year. What overhead markup percentage must be added to each job's costs just to recover overhead?

• a.12%✓
• b.8.3%
• c.20%
• d.1.2%

To recover overhead, spread it across the year's direct costs: $120,000 / $1,000,000 = 0.12, or 12%. So the contractor must add at least 12% to each job's direct cost just to break even on overhead — profit must be added on top of that. Setting markup below the overhead recovery rate is a classic way a busy company still loses money.