A contractor's job-cost report shows materials are 15% over budget while labor is on budget at the 50% completion point. The contractor should:
Explanation
Job costing exists to surface a problem while there is still time to act: a 15 percent material overrun at the halfway point should be investigated at once, and purchasing or scope corrected before the second half doubles the loss. Waiting for closeout throws away the only chance to correct it. Halting the work over an internal cost variance risks abandonment under B&P §7107, because the owner has changed nothing. And an overrun the owner did not cause is not extra work, so it cannot be billed - with or without a change order.
Law Reference: Job-cost variance analysis (industry practice); B&P §7107 (abandonment)This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
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