A bidder prices craft labor and material accurately but includes nothing for office rent, estimating, accounting, or general insurance. What pricing principle was missed?
- Recover job costs and overhead
- BIndirect costs never affect price
- COverhead applies only to public work
- DOverhead is identical to profit
Why A is correct
The best answer is: Recover job costs and overhead. Office salaries, rent, insurance, licenses, estimating, and other indirect costs remain necessary to perform work. Omitting them can make apparently profitable jobs erode the company. The new fact pattern changes the setting, not the governing rule or management control. The other choices either skip a required step, apply a different rule, or fail to address the stated risk.