Business FinancesQuestion 1203 of 1605
A contractor pays $1,200/month for general liability insurance and $2,000/month office rent. These are examples of:
a.Direct job costs
b.Variable costs that change with each job
c.Sales tax
d.Fixed overhead costs
Explanation
Insurance premiums and office rent are fixed overhead: they recur monthly regardless of how many jobs are underway and are not chargeable to any single project. They must be recovered through the markup applied to jobs.
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