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When calculating overhead costs for bidding purposes in California, which of the following would be classified as indirect overhead rather than direct job costs?

Correct Answer

A) General liability insurance for the contractor's business

General liability insurance covers the contractor's overall business operations and cannot be directly attributed to a specific project, making it indirect overhead. Direct costs like temporary utilities, job-specific workers' compensation, and project security can be traced directly to individual jobs and should be included in direct job costs rather than overhead calculations.

Answer Options
A
General liability insurance for the contractor's business
B
Job site security services for the specific project
C
Temporary utilities installed specifically for the project
D
Workers' compensation insurance premiums for project workers

Why This Is the Correct Answer

General liability insurance covers the contractor's overall business operations and cannot be directly attributed to a specific project, making it indirect overhead. Direct costs like temporary utilities, job-specific workers' compensation, and project security can be traced directly to individual jobs and should be included in direct job costs rather than overhead calculations.

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