Which of the following best describes "overhead" in construction estimating?
Explanation
Overhead is the indirect cost of keeping the business open — office rent, utilities, insurance, administrative wages, vehicle and equipment carrying cost — none of which can be charged to one job, so it is recovered through markup across all of them. Direct labour and job materials are exactly the costs that can be charged to a job. And profit is what remains after overhead is covered, which is why a markup that recovers only profit leaves the overhead unpaid.
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