An owner-operator's contract price is $18,000. Materials are $7,000, subcontractors are $5,000, and overhead is $2,000. What estimated labor amount remains?
Correct Answer
C) $4,000.
Estimated own-labor compensation can be checked by subtracting nonlabor costs from gross contract price: $18,000 - $7,000 - $5,000 - $2,000 = $4,000.
Why This Is the Correct Answer
Estimated own-labor compensation can be checked by subtracting nonlabor costs from gross contract price: $18,000 - $7,000 - $5,000 - $2,000 = $4,000.
Why the Other Options Are Wrong
Option A: $7,000.
$7,000. is above the supported result for owner-operator payroll; it likely pays the wrong premium tier or counts the same hours twice.
Option B: $3,900.
$3,900. is below the supported result for owner-operator payroll; it likely skips a premium-pay or employer-cost component.
Option D: $3,500.
$3,500. is below the supported result for owner-operator payroll; it likely skips a premium-pay or employer-cost component.
Memory Technique
Estimating Labor payroll: time, premium, reimbursement, proof in separate buckets.
Reference Hint
Study anchor (closed-book): memorize Owner-operator payroll from California Labor Code Sections 1771.4 and 1776; DIR certified payroll. / DIR CPR FAQ owner-operator labor calculation; know the rule or calculation trigger without relying on exam-room lookup.
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