North Carolina Building Contractor License Practice Exam

Which of the following is considered a contractor's general overhead?

1. $50,000

2. $75,000

3. $100,000

4. $125,000

The correct answer is: $100,000

In the context of a contractor's general overhead, the amount is typically used to cover business expenses that are not directly tied to a specific project. General overhead encompasses various costs associated with operating the business, such as rent, utilities, office supplies, salaries of administrative staff, and other expenses that are incurred regardless of the volume of work performed. The chosen amount of $100,000 for general overhead likely represents a standard approximation for mid-sized contracting businesses in a region like North Carolina. This figure can reflect the balance between maintaining necessary business operations while remaining competitive. The other options present different figures, but $100,000 is a reasonable estimate that showcases the typical costs a contractor may need to manage to ensure their business remains viable and capable of completing projects effectively. This understanding helps in budgeting and pricing construction projects accurately.