Utah Contractor Practice Exam

Company overhead is usually between _______________.

1. 5 percent and 20 percent

2. 15 percent and 25 percent

3. 15 percent and 30 percent

4. 20 percent and 40 percent

The correct answer is: 5 percent and 20 percent

Company overhead typically encompasses the ongoing expenses of running a business that are not directly tied to a specific project or sale, such as salaries for administrative staff, rent, utilities, and office supplies. The correct range of company overhead being between 5 percent and 20 percent reflects industry standards for many construction companies, where a tight control of costs is crucial for maintaining profitability. This range acknowledges the varying nature of overhead costs, which can depend on factors like company size, project scope, and operational efficiency. In many construction sectors, keeping overhead below 20 percent allows companies to remain competitive while still covering necessary operational expenses without unduly inflating project costs.