Contracts & ExecutionQuestion 218 of 690
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:
a.Wait until the job is done to investigate
b.Immediately abandon the project
c.Investigate the material variance now and adjust purchasing or take corrective action
d.Bill the owner for the overage with no change order
Explanation
Job costing exists to catch problems early. A 15% material overrun at mid-project should be investigated immediately so the contractor can correct purchasing practices or scope before the loss grows.
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