Business FinancesQuestion 333 of 1632
A contractor's overhead is the same each month whether it completes 2 jobs or 8 jobs. Therefore, the per-job share of overhead is LOWEST when the contractor:
a.Completes fewer jobs over the period
b.Raises its profit margin
c.Lowers its bid prices
d.Completes more jobs over the period
Explanation
Fixed overhead is spread across all jobs done in a period. The more jobs completed, the smaller the overhead allocation each job must absorb, which is why steady work volume improves competitiveness.
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 →
Practice all 1632 questions free — no signup required.
Own the complete CSLB Law & Business guide — PDF + EPUB, $24.99 →
Related questions on this topic
- A contractor finances a $24,000 piece of equipment with a 4-year loan at 7% simple annual interest. What is the total interest paid over the life of the loan?
- A contractor's progress payment application bills $80,000 of completed work. The owner withholds 5% retention. How much cash will the contractor actually receive on this payment?
- Which document collects an independent contractor's name, address, and taxpayer identification number so the payer can later issue a 1099-NEC?
- A schedule of values that allocates more value to early line items than the work actually justifies is sometimes called "front-loading." From the owner's perspective, the risk of front-loading is that:
- A contractor reviews three completed jobs and finds Job A earned $12,000 profit on $100,000 revenue, Job B earned $9,000 on $90,000, and Job C earned $4,000 on $80,000. Which job had the HIGHEST profit margin?
- A contractor that fails to make required quarterly estimated tax payments to the IRS during the year is most likely to face:
Last reviewed: · editorial process
PrepPass team · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)