A time and materials contract specifies labor at $85 per hour with a 1.5 multiplier for overtime. If a worker works 45 hours in one week (with 5 hours overtime), what is the total labor charge?
Correct Answer
B) $4,037.50
Regular time: 40 hours × $85 = $3,400. Overtime: 5 hours × $85 × 1.5 = $637.50. Total: $3,400 + $637.50 = $4,037.50.
Why This Is the Correct Answer
The calculation correctly separates regular time from overtime hours and applies the appropriate rates. Regular time is calculated as 40 hours × $85 = $3,400, while overtime uses the 1.5 multiplier: 5 hours × $85 × 1.5 = $637.50. The total labor charge is the sum of both: $3,400 + $637.50 = $4,037.50.
Why the Other Options Are Wrong
Option A: $3,825
This answer ($3,825) appears to use an incorrect calculation method, possibly applying a uniform rate without properly accounting for the overtime multiplier of 1.5.
Option C: $4,250
This answer ($4,250) incorrectly applies the overtime multiplier to all 45 hours rather than just the 5 overtime hours, resulting in an overcharge.
Option D: $4,462.50
This answer ($4,462.50) significantly overcharges and likely applies an incorrect multiplier or calculation method to the total hours worked.
Memory Technique
Remember 'ROTO': Regular first (40 hrs), Overtime second (excess hrs), Total multiplier (1.5), Overall sum - always keep regular and overtime separate in your calculations.
Reference Hint
Florida Building Contractor Reference Manual - Contract Administration and Labor Cost Calculations chapter
More Contract Admin Questions
A project experiences a 30-day delay due to unusually severe weather. The contract includes a liquidated damages clause of $1,000 per day for delays. If the weather delay is excusable but not compensable, what liquidated damages apply?
A commercial project requires a total of 12 inspections. The building department charges $85 per inspection for the first 5 inspections, $65 for inspections 6-10, and $45 for any additional inspections. What is the total inspection fee?
What document must be posted at the job site before a Certificate of Occupancy can be issued for a commercial building?
A mixed-use development requires a variance for reduced setbacks. The property is located within 500 feet of a hospital. What additional consideration must be addressed?
A LEED project requires tracking of regional materials. Materials are considered regional if they are extracted, harvested, or recovered, as well as manufactured within what distance of the project site?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Project Management
60 questions · 70% to pass
Previous Question
A contractor discovers unexpected rock conditions requiring additional excavation costs of $25,000. The original contract was $500,000. If the change order includes a 15% markup on the additional work, what is the new contract amount?
Next Question
What is the standard retainage percentage typically held on private construction projects in Florida?