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NASCALA > Basic Business Law > Flashcards

Basic Business Law Flashcards

1
Q

Which of the followin is an effective measure for improving job profitability?

A

Improve Safety

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2
Q

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?

A

$50,700

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3
Q

Employer must provide W-2 Form No Later Than?

A

January 31st.

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4
Q

Weakness of cash basis accounting method?

A

Does not match revenues with expenses.

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5
Q

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?

A

$525.

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6
Q

$11,000 estimate includes materials $2400, Labor $4,000, Payroll Tax at 15% of Labor, OH at 20% of all costs, what is profit?

A

$2,600.

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7
Q

Bond guarantees project will be completed according to plans.

A

Performacne Bond.

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8
Q

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?

A

$275.

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9
Q

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?

A

$0.

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10
Q

Estimating labor is best organized by?

A

Type of Activity.

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11
Q

The project manager handles all of the following, except?

A

Payroll.

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12
Q

Gross profit is computed by subtracting?

A

Direct cost from sales.

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13
Q

Which of the following is a fixed asset?

A

Machinery.

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14
Q

Which one of the following contracts with sub-contractors?

A

Prime Contractor.

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15
Q

What is a breach of contract?

A

Either party doesn’t do what the contract requires.

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16
Q

What is the most common type of breach of contract in construciton disputes?

A

Action for Damages.

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17
Q

What can provide emergency information if an employee swallows a harmful substance on a jobsite?

A

MSDS.

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18
Q

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.

A

Solution: 250LF x $2.00/LF = $500. $500 x 30% = $150. $500+$150 = $650.

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19
Q

Employee labor costs include?

A

Workers Comp Insurance.

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20
Q

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?

A

$150 - $175.

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21
Q

A contract is made by an unlicensed contractor for work that requires a license. The work is perfromed. what king of contract is this?

A

Unenforceable Contract.

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22
Q

A business with employees is requried to obtain an EIN from?

A

IRS.

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23
Q

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?

A

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.

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24
Q

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?

A

4.

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25
Q

A construction compnay has current assets of $20,000 and current liabilities of $10,000 what is the liquidity ratio?

A

2:1. Current assets divided by current liabilities = Liquidity Ratio.

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26
Q

What is the percent withheld for Social Security?

A

6.20?

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27
Q

What percent of the cost of an employee’s worker compnesation can be directly passed to teh employee?

A

0.

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28
Q

An employer must keep a detailed record of all non-exempt employees excpet?

A

Time the employee left work each day.

29
Q

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?

A

136 x 35 = 4,760 (unit) ; 136 x 1.5 = 204 (time); $204 x $1750 = 3,750 + 4,760 = $8,330.

30
Q

A licensee is on inactive status when he contracts for some work that requires a license, when is this appropriate?

A

Never.

31
Q

What is the maximum action the board can take against a licensee?

A

Revoke and suspend license.

32
Q

What type of bond guarantees that the contractor will do the work at the submitted bid price that entered into with the owner?

A

Bid Bond.

33
Q

All of the following are true about a corporation except for?

A

Owners are personally liable for debs of the corporation.

34
Q

Which of the following is covered by the ADA?

A

Aids

35
Q

A licensed contractor pulls permits for an unlicensed contractor. The work is inspected by code official and approved as code compliant. This act is _____?

A

Illegal and subject o disciplinary action.

36
Q

A licensed contractor retires and sells business to unlicensed corporation. When can the new company submit bids and do construcion work ________?

A

After they have been issued a license by the board?

37
Q

Maximum lenght of time for expired license before a new license must be applied for ______?

A

12 months.

38
Q

What is the maximum fine the board can issue against a contractor _______?

A

$5,000.

39
Q

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?

A

The contractor in full.

40
Q

What type of insurance covers property and materials for loss or damage?

A

Builders Risk Insurance.

41
Q

A contractor accidentily drops a hammer injuring a passerby. What type of insurance would this?

A

Liability Insurance.

42
Q

A method that may offer some protection form liability for the contractor is _______?

A

Verify subcontractors insurance coverage.

43
Q

All of the following are components of an initial bid except for _______?

A

Change Order.

44
Q

What is the term used for a financial loss incurred due to breach of contract?

A

Damages.

45
Q

What is the most common remedy for breach of contract?

A

action for damages.

46
Q

which best describes cost plus contract?

A

Pays direct cost adn mark-up.

47
Q

Type of constuction contract where contractor is paid cost of materials plus a hourly fee.

A

Cost plus Contract.

48
Q

What is the purpose for a change order?

A

Contractual means of changin original plans and specifications.

49
Q

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 ____?

A

$16,684.

50
Q

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).

A

Between $401 and $425.

51
Q

An employer classifies an employee as an independent contractor and receives a lower workers compnesation expense. This is considered which of the following?

A

Insurance Fraud.

52
Q

Which of the following is considered legal to ask a prospective employee?

A

Are you avialbe to perform shift work?

53
Q

What inspection method is used for contractor wih a high injury rate.

A

Programmed Inspections.

54
Q

Which of the following is an effective measure for improving job profitability?

A

Improve Safety.

55
Q

What inspeciton method is used for contractors with a high injury rate.

A

Programmed Inspections.

56
Q

Who is responsible for providing safe working conditions?

A

Employer.

57
Q

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.

A

$59,000.

58
Q

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?

A

$20,125.

59
Q

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?

A

Between $150 and $175 dollars ($169).

60
Q

All of the follwoign are part of an income statement except for?

A

Payroll Taxes.

61
Q

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?

A

Minus (-) 8,200.

62
Q

The note on the company truck is to be paid off at the end of the year. This is considered to be a _____?

A

Current Liability.

63
Q

The federal tax form 941 is used for ?

A

Quarterly Federal Tax Deposits.

64
Q

if payroll taxes are $5000 annually, tax deposits must be made?

A

Monthly.

65
Q

Contractors must provide a 1099 to independent contractors no later than _____?

A

January 31st.

66
Q

For purposes of lein law, who is considered to be in direct contract with the owner?

A

Prime Contractor.

67
Q

Who is a direct leinor?

A

General Contractor.

68
Q

A subcontractor is working on a family residence if required, he must file a lein within ______?

A

90 Days.

69
Q

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:

A

$16,684.

NASCALA (24 decks)

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