Texas Contractor Exam — All Questions

What are 'submittals' on a construction project?

• a.The contractor's monthly payment applications
• b.Shop drawings, product data, and samples✓
• c.The permits filed with the building department
• d.The as-built drawings turned over at closeout

Submittals — shop drawings, product data sheets, and physical samples — are provided by the contractor and subcontractors so the architect or engineer can verify that the materials and equipment to be installed conform to the design intent and specifications before they are ordered or fabricated. Reviewing submittals early catches mismatches on paper rather than after costly materials arrive or are installed.

A 'notice to proceed' issued by the owner tells the contractor:

• a.The official date to begin work✓
• b.That the final inspection has passed
• c.That the building may now be occupied
• d.That the contract price has been finalized

A notice to proceed (NTP) is the owner's formal authorization directing the contractor to start the work, and it frequently establishes the date from which the contract time (and any completion deadline or liquidated-damages period) is measured. It marks the transition from award to active construction. It is distinct from a certificate of occupancy, which comes at the end and authorizes use of the finished building.

The 'punch list' near the end of a project is:

• a.A list of workers still owed wages
• b.The schedule of upcoming inspections
• c.A record of every change order on the job
• d.Minor items still to be corrected✓

A punch list is the itemized list of minor deficiencies and unfinished details — touch-up paint, a missing cover plate, an adjustment to a door — that must be corrected before the work is finally accepted and final payment (including retainage) is released. It is generated at substantial completion, when the project is usable but not yet 100% finished, and it defines the last work owed.

'Substantial completion' on a construction project generally means:

• a.The contract has been signed and work is about to begin
• b.The owner can use the project for its intended purpose✓
• c.Every punch-list item has been corrected
• d.The contractor has been fully paid including retainage

Substantial completion is the milestone at which the project is complete enough for the owner to occupy or use it for its intended purpose, even though minor punch-list items remain. It is significant because it often starts warranty periods, shifts responsibility for insurance and utilities, and may trigger release of most retainage. Final completion, which comes later, means every remaining item is finished.

Why should a site superintendent keep a written daily report on a construction project?

• a.Because the daily report replaces the need for a project schedule
• b.Because it serves as the crew's official payroll timesheet
• c.To create a daily factual record of conditions and work✓
• d.Because the building official requires one at each inspection

A daily report is a contemporaneous factual record of what happened on site each day — weather, manpower and equipment present, work accomplished, deliveries, visitors, and any problems or delays. This documentation is invaluable later for resolving disputes, supporting or defending delay and change-order claims, and reconstructing events, because memories fade but a consistent daily log is strong evidence.

The basic accounting equation is:

• a.Assets = Liabilities + Owner's Equity✓
• b.Assets = Revenue - Expenses
• c.Profit = Assets + Liabilities
• d.Owner's Equity = Revenue x Expenses

The fundamental accounting equation, which underlies every balance sheet, is Assets = Liabilities + Owner's Equity. In other words, everything the company owns is financed either by what it owes to others (liabilities) or by the owners' stake (equity). Rearranged, Owner's Equity = Assets - Liabilities. The balance sheet must always 'balance' according to this equation.

Under the accrual method of accounting, revenue is recorded when:

• a.The cash is deposited in the bank
• b.The owner signs the original contract
• c.The invoice is mailed to the owner
• d.The work is performed✓

The accrual method records revenue when it is earned and expenses when they are incurred, regardless of when cash actually moves. This gives a truer picture of a construction company's financial performance than the cash method, which records income and expenses only when money changes hands. Because contractors often perform work long before being paid, accrual (and percentage-of-completion) accounting better reflects real profitability.

A long construction project recognizes revenue gradually as the job progresses rather than all at the end. This accounting approach is called:

• a.Cash-basis accounting
• b.Percentage of completion✓
• c.First-in, first-out (FIFO)
• d.Double-entry bookkeeping

The percentage-of-completion method recognizes revenue and profit in proportion to the work completed over the life of a long-term project — for example, if a job is 40% complete, roughly 40% of the expected revenue is recognized. This matches income to the effort expended each period and avoids distorting results by booking all revenue only when the job finishes, giving a more accurate ongoing picture of performance.

'Overbilling' on a construction project means the contractor has:

• a.Charged the owner more than the total contract price
• b.Paid subcontractors more than they were owed
• c.Billed for more work than has been completed✓
• d.Forgotten to send an invoice for completed work

Overbilling (billings in excess of costs) occurs when the amount invoiced to the owner is greater than the value of work actually completed so far. It can help cash flow, but it also means the contractor is holding money for work not yet performed, which can mask problems and create a liability. The opposite, underbilling, ties up the contractor's own cash and can signal poor billing discipline.

Why do sureties and lenders pay close attention to a contractor's working capital and current ratio?

• a.They show whether the contractor can pay near-term bills✓
• b.They set the contractor's workers' compensation rate
• c.They determine which building codes apply to each project
• d.They decide which OSHA standards apply to the company's work

Working capital (current assets minus current liabilities) and the current ratio (current assets divided by current liabilities) measure short-term liquidity — the contractor's ability to pay bills, meet payroll, and buy materials while waiting to be paid. Sureties issuing bonds and banks extending credit rely on these figures to judge whether the contractor can finance and finish jobs, so weak liquidity can limit bonding capacity.

On a balance sheet, which of the following is a current asset?

• a.A company-owned excavator expected to last ten years
• b.Accounts receivable✓
• c.The company's office building and land
• d.A long-term equipment loan the company owes

Current assets are resources expected to be converted to cash or used up within one year, such as cash, accounts receivable, and materials inventory. Accounts receivable — money owed by customers and due shortly — is a classic current asset. Long-lived equipment and buildings are fixed (long-term) assets, and a long-term loan is a liability, not an asset.

OSHA construction standards are found in which part of Title 29 of the Code of Federal Regulations?

• a.29 CFR Part 1910
• b.29 CFR Part 1904
• c.29 CFR Part 1926✓
• d.29 CFR Part 40

OSHA's safety and health standards for the construction industry are contained in 29 CFR Part 1926. (General industry standards are in Part 1910, and injury recordkeeping requirements are in Part 1904.) Knowing that construction work is governed by Part 1926 helps you locate specific rules — for example, fall protection at 1926.501 and excavations at 1926.651-652.

OSHA requires that a 'competent person' inspect excavations. What defines a competent person under 29 CFR 1926?

• a.One who can identify hazards and can correct them promptly✓
• b.The crew member with the most years on the job
• c.A worker who has completed OSHA safety training
• d.Any supervisor the employer puts in charge

OSHA defines a competent person as one who is capable of identifying existing and predictable hazards in the surroundings or working conditions and who has the authorization to take prompt corrective measures to eliminate them. For excavations (29 CFR 1926.651), a competent person must inspect the trench and protective systems daily and as conditions change. The role requires both knowledge and the authority to act.

Under OSHA's Hazard Communication Standard, what document must be available to workers to inform them about the hazards of a chemical product on site?

• a.A building permit
• b.A certificate of occupancy
• c.A mechanic's lien
• d.A Safety Data Sheet (SDS)✓

The Hazard Communication Standard (29 CFR 1926.59, adopting 1910.1200) requires that hazardous chemicals be labeled and that a Safety Data Sheet (SDS) be readily accessible to workers. The SDS describes the chemical's hazards, safe handling, protective measures, and first-aid and emergency response information. Workers have a 'right to know' the dangers of the materials they handle, and the SDS is the core document delivering that information.

OSHA identifies the 'Fatal Four' hazards responsible for the majority of construction worker deaths. Which of the following is one of them?

• a.Paperwork errors
• b.Falls to a lower level✓
• c.Parking violations
• d.Late material deliveries

OSHA's 'Fatal Four' (sometimes called the Focus Four) are the leading causes of construction fatalities: falls, struck-by incidents, electrocutions, and caught-in/between hazards. Falls are consistently the single largest category, which is why fall protection (29 CFR 1926.501) is so heavily emphasized and enforced. Focusing safety efforts on these four hazard types prevents the greatest share of deaths.

Before workers enter a permit-required confined space (such as a manhole or tank), a critical first step under OSHA is to:

• a.Test the atmosphere before and during entry✓
• b.Send in one worker briefly to check the air
• c.Ventilate the space and enter without testing
• d.Open the cover and let the space air out for an hour

Permit-required confined spaces can contain oxygen-deficient or toxic/flammable atmospheres that are not obvious. OSHA requires that the atmosphere be tested and monitored — for oxygen content, flammable gases, and toxic substances — before and during entry, along with a permit system, attendant, and rescue plan. Many confined-space deaths occur when would-be rescuers rush in; atmospheric testing and proper procedures prevent these tragedies.

The safety procedure of 'lockout/tagout' is primarily used to:

• a.Lock the job-site tool trailer at night
• b.Tag completed work as ready for inspection
• c.Control hazardous energy during servicing✓
• d.Restrict tool use to trained operators only

Lockout/tagout (LOTO) is the practice of isolating and de-energizing equipment and applying locks and tags so that machinery or electrical systems cannot be accidentally energized or started while a worker is servicing or repairing them. It protects against the sudden release of hazardous energy — electrical, mechanical, hydraulic — that could injure or kill the person working on the equipment. It is a key control against electrocution and caught-in hazards.

A personal fall-arrest system used on a construction site generally consists of which three basic components?

• a.A hard hat, safety glasses, and gloves
• b.A guardrail, a safety net, and a toeboard
• c.A body belt, a rope grab, and a warning line
• d.An anchorage, a full-body harness, and a connector✓

A personal fall-arrest system (PFAS) has three essential parts, sometimes remembered as the ABCs: an Anchorage point strong enough to hold the forces of a fall, a full-Body harness worn by the worker, and a Connector such as a shock-absorbing lanyard or self-retracting lifeline linking the harness to the anchor. All three must be present and properly rated; a harness alone provides no protection without a proper anchor and connector.

At the end of the year, an employee receives a W-2 while an independent contractor who was paid $600 or more receives a:

• a.Form I-9
• b.Form 1099-NEC✓
• c.Form W-4
• d.Form W-9 at year end

Employees receive a W-2 reporting wages and the taxes withheld from their pay. Independent contractors are not employees, so no taxes are withheld; instead a business that pays a contractor $600 or more in a year generally issues a Form 1099-NEC reporting that nonemployee compensation. Using the correct form follows directly from correctly classifying the worker, and the IRS uses these forms to track income.

On federally funded public works projects, the Davis-Bacon Act generally requires contractors to:

• a.Pay at least the locally prevailing wage and benefits✓
• b.Hire only union labor for the project
• c.Pay every worker the federal minimum wage
• d.Pay time-and-a-half for all hours on site

The federal Davis-Bacon Act requires that laborers and mechanics on federally funded or assisted construction contracts (above a threshold amount) be paid no less than the locally prevailing wages and fringe benefits, as determined by the Department of Labor for the area and trade. Many states have similar 'little Davis-Bacon' prevailing-wage laws for state-funded projects. Certified payroll records document compliance.

How is the cost of a contractor's workers' compensation insurance primarily determined?

• a.By the number of employees on the payroll
• b.By the total dollar value of jobs completed
• c.By payroll and the risk class of the work✓
• d.By the company's years in business

Workers' compensation premiums are generally calculated from the employer's payroll multiplied by a rate tied to the risk classification of the work — higher-risk trades like roofing carry higher rates than lower-risk office work. An experience modification factor then adjusts the premium up or down based on the company's actual claims history. Keeping a good safety record therefore directly lowers insurance costs.

Under the federal Fair Labor Standards Act, what is generally true about the overtime standard?

• a.Overtime is owed after 8 hours in any single day nationwide
• b.Overtime must always be paid at double the regular rate
• c.Overtime applies only to hourly workers on public jobs
• d.Hours over 40 in a workweek are paid at 1.5 times the rate✓

The FLSA's federal overtime rule requires covered nonexempt employees to be paid at least one-and-one-half times their regular rate for hours worked beyond 40 in a workweek. The federal standard is measured weekly, not daily, and the premium is time-and-a-half (not double time). Some states impose additional daily-overtime rules, but the nationwide FLSA baseline is the 40-hour workweek at 1.5x.

Federal anti-discrimination laws such as Title VII prohibit an employer from making hiring and firing decisions based on:

• a.Race, color, religion, sex, or national origin✓
• b.A worker's documented job performance
• c.Whether the worker holds the required trade skills
• d.The worker's attendance and punctuality on the job

Title VII of the Civil Rights Act prohibits employment discrimination based on protected characteristics — race, color, religion, sex, and national origin — and other federal laws add age (ADEA) and disability (ADA) as protected classes. Employers may absolutely make decisions based on legitimate factors like skill, performance, and attendance; what they may not do is base employment decisions on these protected characteristics.

What is the purpose of the Form W-4 that a new employee completes?

• a.To verify the worker's legal authorization to work in the U.S.
• b.To set the employee's federal income tax withholding✓
• c.To enroll the employee in the company benefit plan
• d.To calculate the company's workers' compensation premium

The Form W-4 (Employee's Withholding Certificate) is completed by the employee so the employer knows how much federal income tax to withhold from each paycheck based on the employee's filing status and adjustments. It is distinct from the Form I-9, which verifies identity and work authorization. Both are completed at hire, but they serve different functions — tax withholding versus employment eligibility.

Which model code most commonly governs the construction of one- and two-family dwellings and townhouses?

• a.The National Electrical Code (NEC)
• b.The International Building Code (IBC)
• c.The International Residential Code✓
• d.The Uniform Plumbing Code (UPC)

The International Residential Code (IRC) is the model code specifically written for one- and two-family dwellings and townhouses up to three stories, bundling building, plumbing, mechanical, and electrical provisions for homes into one document. Larger and commercial structures fall under the International Building Code (IBC). Most U.S. jurisdictions adopt one or both of these model codes, then add local amendments.

A 'rough-in' inspection on a building project generally occurs:

• a.After framing and utility lines, before walls are covered✓
• b.After the drywall is hung but before it is painted
• c.Before framing begins, at the foundation stage
• d.After the final inspection, before occupancy

A rough-in inspection takes place once the framing is up and the electrical wiring, plumbing pipes, and mechanical/HVAC lines are installed but before insulation and drywall cover them. Inspecting at this stage lets the building official verify that concealed work meets code while it is still visible and accessible. Passing rough-in is required before the work may be closed up, avoiding costly tear-out later.

When a local jurisdiction adopts a model building code, what are 'local amendments'?

• a.Fines charged for working without a permit
• b.Interpretations the code's authors publish between editions
• c.Optional design suggestions with no legal force
• d.Local changes to the model code that carry the force of law✓

Jurisdictions typically adopt a model code (such as the IBC or IRC) as their base, then enact local amendments — additions or modifications that address regional concerns like seismic activity, hurricanes, snow load, or soil conditions. Once adopted, those amendments carry the force of law in that jurisdiction. This is why the core requirements are similar nationwide, yet a contractor must always check the specific local code in force.

Electrical work in most U.S. jurisdictions is governed by which widely adopted model code?

• a.The International Residential Code (IRC)
• b.The National Electrical Code (NEC / NFPA 70)✓
• c.The Americans with Disabilities Act (ADA)
• d.The Occupational Safety and Health Act (OSH Act)

The National Electrical Code (NEC), also known as NFPA 70, is the model standard for safe electrical design and installation, and it is adopted (often with amendments) by the great majority of U.S. jurisdictions. It sets requirements for wiring, grounding, circuit protection, and equipment to prevent electrical fires and shock. While the IRC incorporates residential electrical provisions, the NEC is the underlying electrical standard.

A contractor performs structural work without pulling a required building permit. A likely consequence is:

• a.Fines and being ordered to uncover the concealed work✓
• b.No consequence, since the work still meets code
• c.A guarantee that no inspections will ever be needed
• d.A retroactive permit issued with no inspection

Working without a required permit undermines the inspection system that verifies code compliance. When discovered, the jurisdiction can issue stop-work orders and fines, and may require the contractor to uncover concealed work so it can be inspected — or even tear out and redo non-compliant work. Unpermitted work can also create problems at resale and void insurance, so pulling required permits protects everyone.

Accessibility requirements in construction, such as those affecting public and commercial buildings, are most directly associated with which of the following?

• a.The National Electrical Code (NFPA 70)
• b.OSHA construction safety standards
• c.The Americans with Disabilities Act✓
• d.The Uniform Commercial Code

Accessibility in the built environment — features like ramps, accessible restrooms, door widths, and reach ranges in public accommodations and commercial facilities — is governed by the Americans with Disabilities Act (ADA) standards and the accessibility provisions incorporated into building codes (often based on the ICC A117.1 standard). Contractors building or altering covered facilities must meet these requirements so the spaces are usable by people with disabilities.

A slab measures 24 ft by 30 ft and is 4 inches thick. Adding 5 percent for waste and rounding up to the next quarter yard, how much concrete should be ordered?

• a.9.0 cubic yards
• b.8.9 cubic yards
• c.9.5 cubic yards✓
• d.26.7 cubic yards

Convert the thickness first: 4 in / 12 = 0.3333 ft. Volume = 24 x 30 x 0.3333 = 240 cubic feet, and 240 / 27 = 8.89 cubic yards. Adding 5 percent gives 9.33 cubic yards, which rounds up to the next quarter yard: 9.5 cubic yards. Stopping at 8.9 forgets the waste, rounding the bare 8.89 up gives 9.0 without any waste, and 26.7 comes from dividing by 9 (the square-yard divisor) instead of 27.

A continuous footing is 24 inches wide and 12 inches deep and runs 135 linear feet. How many cubic yards of concrete does it contain?

• a.10 cubic yards✓
• b.120 cubic yards
• c.270 cubic yards
• d.30 cubic yards

Put every dimension in feet: 24 in = 2 ft wide, 12 in = 1 ft deep. Volume = 2 x 1 x 135 = 270 cubic feet, and 270 / 27 = 10 cubic yards. Reporting 270 means the cubic feet were never converted, 30 comes from dividing by 9 rather than 27, and 120 comes from treating the 24-inch width as 24 feet.

A rectangular room measures 14 ft by 18 ft with 9 ft ceilings. What is the total area of the four walls, before deducting any openings?

• a.288 square feet
• b.252 square feet
• c.2,268 square feet
• d.576 square feet✓

Wall area equals the perimeter times the wall height. Perimeter = 2 x (14 + 18) = 64 lineal feet, so 64 x 9 = 576 square feet. Using 14 + 18 = 32 instead of the full perimeter yields 288, which covers only two walls; 252 is the floor area (14 x 18); and 2,268 is the room's volume in cubic feet (14 x 18 x 9), not an area.

A basement excavation measures 40 ft by 30 ft by 9 ft deep. The soil swells 25 percent once it is dug. How many cubic yards must be hauled away?

• a.400 cubic yards
• b.500 cubic yards✓
• c.320 cubic yards
• d.13,500 cubic yards

Bank volume = 40 x 30 x 9 = 10,800 cubic feet, and 10,800 / 27 = 400 cubic yards in place. Loose soil occupies more room, so multiply by the swell factor: 400 x 1.25 = 500 cubic yards to haul. Answering 400 ignores swell entirely, 320 comes from dividing by 1.25 instead of multiplying, and 13,500 applies swell to the cubic feet and never converts to cubic yards.

A parking pad 45 ft by 36 ft receives a 4-inch compacted gravel base. How many cubic yards of gravel does that base require?

• a.20 cubic yards✓
• b.240 cubic yards
• c.60 cubic yards
• d.540 cubic yards

Area = 45 x 36 = 1,620 square feet, and 4 inches = 0.3333 ft, so the volume is 1,620 x 0.3333 = 540 cubic feet. Divide by 27 to get 20 cubic yards. Leaving the answer at 540 skips the conversion to cubic yards, 60 comes from dividing by 9, and 240 comes from using 4 feet of depth instead of 4 inches.

A gable end is 32 ft wide at the top plate and rises 8 ft to the ridge. What is the area of that single gable triangle?

• a.256 square feet
• b.40 square feet
• c.128 square feet✓
• d.64 square feet

A gable end is a triangle, so the area is one-half base times height: 0.5 x 32 x 8 = 128 square feet. Multiplying 32 x 8 and stopping gives 256, which is the full rectangle and forgets the one-half. Halving the base and then halving again produces 64, and adding the two dimensions instead of multiplying them produces 40.

A round concrete pier is 24 inches in diameter and 4 ft deep. How many cubic feet of concrete does one pier take?

• a.25.1 cubic feet
• b.50.3 cubic feet
• c.16.0 cubic feet
• d.12.6 cubic feet✓

The area of a circle is pi times the radius squared, and the radius is half of the 24-inch diameter, or 1 ft. Area = 3.1416 x 1 x 1 = 3.14 square feet, and 3.14 x 4 ft deep = 12.6 cubic feet. Using the 2-ft diameter as the radius gives 50.3, using the circumference (2 x pi x r = 6.28) in place of the area gives 25.1, and treating the pier as a 2 ft by 2 ft square column gives 16.0.

A floor plan is a 40 ft by 30 ft rectangle with a 10 ft by 12 ft corner notched out of it. What is the floor area?

• a.1,200 square feet
• b.1,080 square feet✓
• c.1,320 square feet
• d.140 square feet

Take the area of the enclosing rectangle and subtract the missing corner: 40 x 30 = 1,200 square feet, less 10 x 12 = 120 square feet, leaves 1,080 square feet. Answering 1,200 ignores the notch, 1,320 adds the notch instead of subtracting it, and 140 is the perimeter of the enclosing rectangle rather than an area.

A building footprint measures 62 ft by 38 ft. How many lineal feet of foundation wall run around the outside of it?

• a.200 lineal feet✓
• b.100 lineal feet
• c.400 lineal feet
• d.2,356 lineal feet

Perimeter of a rectangle = 2 x (length + width) = 2 x (62 + 38) = 200 lineal feet. Adding the two dimensions only once gives 100, which counts just two of the four sides. Doubling each side and then doubling the total again gives 400, and 2,356 is the footprint area (62 x 38) in square feet, not a length.

A subfloor covers an area 24 ft by 36 ft. Using 4 ft by 8 ft sheets and no waste allowance, how many sheets are required?

• a.32 sheets
• b.22 sheets
• c.27 sheets✓
• d.108 sheets

Floor area = 24 x 36 = 864 square feet, and each 4 ft by 8 ft sheet covers 32 square feet, so 864 / 32 = 27 sheets. Dividing 864 by 27 (the cubic-yard divisor) mistakenly returns 32, dividing by the sheet's 8-ft length instead of its area returns 108, and figuring 4 ft by 10 ft sheets at 40 square feet each returns 22.

A straight wall runs 48 ft with studs 16 inches on center. Counting the stud that closes the last space and ignoring corners and openings, how many studs are needed?

• a.36 studs
• b.37 studs✓
• c.25 studs
• d.48 studs

Convert the wall to inches: 48 ft x 12 = 576 inches, and 576 / 16 = 36 spaces. A layout always needs one more stud than it has spaces, so 36 + 1 = 37 studs. Answering 36 forgets the stud that closes the last bay, 25 comes from spacing at 24 inches on center, and 48 comes from the shortcut of one stud per foot of wall.

How many board feet are contained in twelve pieces of 2 x 8 lumber, each 16 ft long?

• a.256 board feet✓
• b.3,072 board feet
• c.30.7 board feet
• d.21.3 board feet

Board feet = thickness in inches x width in inches x length in feet, divided by 12. One piece is 2 x 8 x 16 / 12 = 21.33 board feet, and twelve pieces give 21.33 x 12 = 256 board feet. Never dividing by 12 gives 3,072, dividing by 100 instead of 12 gives 30.7, and 21.3 is the volume of a single piece rather than the whole order.

A room measures 16 ft by 20 ft and has two 3-ft door openings that receive no base. How many lineal feet of baseboard are needed?

• a.72 lineal feet
• b.69 lineal feet
• c.36 lineal feet
• d.66 lineal feet✓

Perimeter = 2 x (16 + 20) = 72 lineal feet, and the two 3-ft openings remove 6 feet: 72 - 6 = 66 lineal feet. Answering 72 never deducts the doors, 69 deducts only one of the two openings, and 36 adds the two room dimensions once instead of taking the full perimeter.

A roof plan area is 40 ft by 50 ft. The slope multiplier supplied for this pitch is 1.25. At three bundles per square, how many bundles of shingles are required?

• a.60 bundles
• b.25 bundles
• c.75 bundles✓
• d.250 bundles

Plan area = 40 x 50 = 2,000 square feet, and applying the slope multiplier gives the true sloped area: 2,000 x 1.25 = 2,500 square feet. One roofing square is 100 square feet, so that is 25 squares, and 25 x 3 = 75 bundles. Skipping the slope multiplier gives 60, ordering one bundle per square gives 25, and dividing by 10 instead of 100 gives 250.

A roof measures 2,600 square feet. One roll of underlayment covers 400 square feet after laps. How many rolls must be ordered?

• a.26 rolls
• b.7 rolls✓
• c.6 rolls
• d.65 rolls

Divide the roof area by the net coverage of a roll: 2,600 / 400 = 6.5 rolls. Material comes in whole rolls, so the order rounds up to 7. Answering 6 drops the partial roll and leaves the job short, 26 assumes one roll per 100-square-foot square, and 65 comes from dividing by 40 instead of 400.

A tile floor totals 700 square feet. One 50-pound bag of thinset covers 60 square feet at the required trowel size. How many bags must be ordered?

• a.11 bags
• b.14 bags
• c.7 bags
• d.12 bags✓

Divide the area by the stated coverage: 700 / 60 = 11.67 bags, which rounds up to 12 whole bags. Rounding down to 11 leaves the setter short before the last row. Dividing by the 50-pound bag weight rather than the 60-square-foot coverage gives 14, and dividing by 100 (the roofing-square factor) gives 7.

A wall area of 1,800 square feet is to receive two coats. The paint covers 350 square feet per gallon. How many gallons should be ordered?

• a.11 gallons✓
• b.6 gallons
• c.10 gallons
• d.5 gallons

Two coats mean the paint must cover the area twice: 1,800 x 2 = 3,600 square feet, and 3,600 / 350 = 10.3 gallons, which rounds up to 11 whole gallons. Answering 10 drops the partial gallon, while 6 and 5 both figure a single coat (1,800 / 350 = 5.1), rounded up and rounded down respectively.

A contractor adds a 25 percent markup to a job that costs $40,000. What gross profit MARGIN does the resulting price actually earn?

• a.25 percent
• b.33.3 percent
• c.20 percent✓
• d.16.7 percent

Markup is measured against cost, margin against the selling price. Price = $40,000 x 1.25 = $50,000, so the profit is $10,000 and the margin is $10,000 / $50,000 = 20 percent. Answering 25 percent assumes markup and margin are the same number, which they never are; 33.3 percent is the markup that would be needed to produce a 25 percent margin; and 16.7 percent is the margin a 20 percent markup would produce.

A job sells for $64,000 and its direct costs are $48,000. What is the gross profit percentage measured on the selling price?

• a.33.3 percent
• b.25 percent✓
• c.75 percent
• d.16 percent

Gross profit = $64,000 - $48,000 = $16,000, and gross profit percentage divides that by the selling price: $16,000 / $64,000 = 25 percent. Dividing the same $16,000 by the $48,000 cost gives 33.3 percent, which is the markup, not the margin. The 75 percent figure is cost as a share of price, and 16 percent simply reads the profit dollars as a percentage.

A company expects $2,400,000 of revenue this year and carries $360,000 of annual overhead. What share of every revenue dollar must go to overhead?

• a.17.6 percent
• b.6.7 percent
• c.1.5 percent
• d.15 percent✓

Allocating overhead against revenue divides overhead by revenue: $360,000 / $2,400,000 = 0.15, or 15 percent of each dollar billed. Measuring the same overhead against the $2,040,000 of direct cost instead gives 17.6 percent, which is the markup on cost rather than the share of revenue. Dividing revenue by overhead returns the ratio 6.7, not a percentage, and 1.5 percent is a misplaced decimal.