Basic Business Law Flashcards
Which of the followin is an effective measure for improving job profitability?
Improve Safety
It cost $50 to produce product a, $150 to produce product B, and $375 to produce product C. We must produce 27 of product A, 56 of B, and 78 of C. We want a 30% mark-up. What is total cost?
$50,700
Employer must provide W-2 Form No Later Than?
January 31st.
Weakness of cash basis accounting method?
Does not match revenues with expenses.
Non-exempt worker is guaranteed $300 a week regardless of how many hours he works. If he works 60 hours, How much will he be paid?
$525.
$11,000 estimate includes materials $2400, Labor $4,000, Payroll Tax at 15% of Labor, OH at 20% of all costs, what is profit?
$2,600.
Bond guarantees project will be completed according to plans.
Performacne Bond.
Compnay pays. 10 cents for workers compenstation for every $100 of salary for office workers and .20 cents per $100 wages fro field workers. $25,000 was paid for officer workers and $125,000 for field workers. Company owes how much?
$275.
There is an accident at the job site. Contractor has liability policy with $1000 deductible. Employee incurs $5000 in medical bills. There is $3,000 equipment damage. Pedestrian has $1000 in medical expense. What amount will insurance pay?
$0.
Estimating labor is best organized by?
Type of Activity.
The project manager handles all of the following, except?
Payroll.
Gross profit is computed by subtracting?
Direct cost from sales.
Which of the following is a fixed asset?
Machinery.
Which one of the following contracts with sub-contractors?
Prime Contractor.
What is a breach of contract?
Either party doesn’t do what the contract requires.
What is the most common type of breach of contract in construciton disputes?
Action for Damages.
What can provide emergency information if an employee swallows a harmful substance on a jobsite?
MSDS.
If materials cost $1.25 per linerar foot and the installation cost equals .75 cents per linear foot. How much would the estimate be for 250 linear feet to be installed? There is a 20% cost for overhead and 10% cost plus overhead.
Solution: 250LF x $2.00/LF = $500. $500 x 30% = $150. $500+$150 = $650.
Employee labor costs include?
Workers Comp Insurance.
Amounts due for supplier “A” is $3,400, 2%/10/NET 30, Supplier “B” is $1600, 1%/10 NET 30, Supplier “C” is $1,950 3%/10NET 30, and supplier “D” is $2650 1%/10 NET 30. What is the total discount if all pay by the 10th of the month?
$150 - $175.
A contract is made by an unlicensed contractor for work that requires a license. The work is perfromed. what king of contract is this?
Unenforceable Contract.
A business with employees is requried to obtain an EIN from?
IRS.
Accourding to the FLSA an employee works 30 hours in week one of works 50 hours in week 2 to make up for the housr lost in week one. The emplyee’s wages are $12 per hour. What is his pay?
Solution: 30 x 12 = 360 for week 1. 40 x 12 + 280 for week 2. week 2 overtime $12 / 2 = $6 +12 = $18 (O.T. Rate). $18 x 10 = $180 (OT. $360+$480+$180+$1,020.
The project will require 90 hours to complete. It must be completed in 3 days. Each day is 8 hours. What is the minimum crew size to complete the job on time?
4.
A construction compnay has current assets of $20,000 and current liabilities of $10,000 what is the liquidity ratio?
2:1. Current assets divided by current liabilities = Liquidity Ratio.
What is the percent withheld for Social Security?
6.20?
What percent of the cost of an employee’s worker compnesation can be directly passed to teh employee?
0.
An employer must keep a detailed record of all non-exempt employees excpet?
Time the employee left work each day.
A contractor is installing material that cost $35 per piece, there are 136 pieces, adn labor is 1 hours and 30 minutes to install one piece a $17.50 per hour, what is the total cost for the installation?
136 x 35 = 4,760 (unit) ; 136 x 1.5 = 204 (time); $204 x $1750 = 3,750 + 4,760 = $8,330.
A licensee is on inactive status when he contracts for some work that requires a license, when is this appropriate?
Never.
What is the maximum action the board can take against a licensee?
Revoke and suspend license.
What type of bond guarantees that the contractor will do the work at the submitted bid price that entered into with the owner?
Bid Bond.
All of the following are true about a corporation except for?
Owners are personally liable for debs of the corporation.
Which of the following is covered by the ADA?
Aids
A licensed contractor pulls permits for an unlicensed contractor. The work is inspected by code official and approved as code compliant. This act is _____?
Illegal and subject o disciplinary action.
A licensed contractor retires and sells business to unlicensed corporation. When can the new company submit bids and do construcion work ________?
After they have been issued a license by the board?
Maximum lenght of time for expired license before a new license must be applied for ______?
12 months.
What is the maximum fine the board can issue against a contractor _______?
$5,000.
A general contractor has a general liability policy with no riders and a $500 deductible. He intentionally does not follow code and an owner incurs a $1,000 loss when the installation fails. Who must cover the damages?
The contractor in full.
What type of insurance covers property and materials for loss or damage?
Builders Risk Insurance.
A contractor accidentily drops a hammer injuring a passerby. What type of insurance would this?
Liability Insurance.
A method that may offer some protection form liability for the contractor is _______?
Verify subcontractors insurance coverage.
All of the following are components of an initial bid except for _______?
Change Order.
What is the term used for a financial loss incurred due to breach of contract?
Damages.
What is the most common remedy for breach of contract?
action for damages.
which best describes cost plus contract?
Pays direct cost adn mark-up.
Type of constuction contract where contractor is paid cost of materials plus a hourly fee.
Cost plus Contract.
What is the purpose for a change order?
Contractual means of changin original plans and specifications.
A project has a total cost of $97,000. Last invoice is due for 100% and regainage (10%). previous draw was 92% complete. Total due is ____?
$16,684.
A contractor pays $180 for 3 hours equipment rental. It takes 7 hours to do the job. if the hourly rate stays the same, what is the acutal cost of the rental (No tax).
Between $401 and $425.
An employer classifies an employee as an independent contractor and receives a lower workers compnesation expense. This is considered which of the following?
Insurance Fraud.
Which of the following is considered legal to ask a prospective employee?
Are you avialbe to perform shift work?
What inspection method is used for contractor wih a high injury rate.
Programmed Inspections.
Which of the following is an effective measure for improving job profitability?
Improve Safety.
What inspeciton method is used for contractors with a high injury rate.
Programmed Inspections.
Who is responsible for providing safe working conditions?
Employer.
A contractor is bidding a job with a direct cost of $45K. Overhead is 12% of direct cost. What bid is requried for a profit of $9,500.
$59,000.
Material cost is $10,000. Wages are 60% of material cost. Overhead is $1500. If profit is 15% on all costs, what is bid amount?
$20,125.
A contractor has 4 suppliers. The amount and terms are as follows: Vendor “A” $3400 2/10 NET 30, Vendor “B” $1600 1/10 NET 30, Vendor “C” $1950 3/10 NET 30, and Vendor “D” $26501/10 NET 30. What is the total amount of the discount?
Between $150 and $175 dollars ($169).
All of the follwoign are part of an income statement except for?
Payroll Taxes.
Cash receipts are $59,200. Disbursements are $67,400. There was $12,000 in cash at the first of the year. What is the cash flow?
Minus (-) 8,200.
The note on the company truck is to be paid off at the end of the year. This is considered to be a _____?
Current Liability.
The federal tax form 941 is used for ?
Quarterly Federal Tax Deposits.
if payroll taxes are $5000 annually, tax deposits must be made?
Monthly.
Contractors must provide a 1099 to independent contractors no later than _____?
January 31st.
For purposes of lein law, who is considered to be in direct contract with the owner?
Prime Contractor.
Who is a direct leinor?
General Contractor.
A subcontractor is working on a family residence if required, he must file a lein within ______?
90 Days.
A project has a total cost of $97,000. Last invoice is due for 100% and retainiage (10%). Previous draw wat at 92% complete. Total due is:
$16,684.
