Business FinancesQuestion 1112 of 1632
Which of the following is an example of OVERHEAD (indirect cost) rather than a direct job cost?
a.A subcontractor's plumbing invoice for the project
b.Office rent and the bookkeeper's salary
c.Wages of a carpenter framing the house
d.Lumber delivered to the jobsite
Explanation
Overhead consists of indirect costs that keep the business running but are not tied to one specific job, such as office rent, administrative salaries, insurance, and utilities. Materials, on-site labor, and subcontractors are direct costs charged to a particular job.
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Related questions on this topic
- A job sells for $50,000 with a 20% gross margin. What are the direct job costs?
- A contractor applies a 100% markup on a $3,000 cost. What margin does that represent, and what is the price?
- A contractor's annual overhead is $120,000 and he expects $600,000 in direct job costs this year. What overhead rate should he add to each job's direct cost to recover overhead?
- A contractor's job has $10,000 direct costs. He adds 15% for overhead and then 10% profit on the resulting subtotal. What is the final price?
- Overhead costs are best described as:
- A contractor completes $800,000 in revenue with $560,000 direct costs and $160,000 overhead. What is the net profit and net profit margin?
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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)