MICHIGAN RESIDENTIAL BUILDERS LICENSE EXAM -
BUSINESS/LAW UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Question:
1. Direct and indirect expenses
Answer:
direct - material, delivery, labor indirect - equipment, repairs, rent, insurance
Question:
2. what is act 227
Answer:
home solicitation act
Question:
3. does it regulate sale of good or services for more than $25
Answer:
YES
Question:
4. how does act 227 prevent misleading or false statements
Answer:
fine of not more than 6 months or $500, or both
Question:
5. what is act 227, cancellation window
Answer:
3 days
Question:
6. what are minimum taxes owed that require you to file taxes
Answer:
$1000 federal $500 state
Question:
7. fixed asset to net worth ratio
Answer:
measures solvency. >75% is not good
fixed assets/net worth
Question:
8. what is typical overhead mark up
Answer:
varies per company but 20%-40% roughly
,Question:
9. what is typical profit mark up
Answer:
10-20% but also varies per company
Question:
10. a complaint is filed by
Answer:
the department
Question:
11. what is promulgating of code
Answer:
updating and adopting
Question:
12. The director of the construction code commission sole statutory authority is to
Answer:
enforce code
Question:
13. types of construction bonds
Answer:
bid - will enter contract if wins bid performance - will complete work payment - will pay subcontractors
Question:
14. how quick to notify MIOSHA of fatality
Answer:
8 hours
Question:
15. when do you need a toe board
Answer:
danger of tools falling from scaffold above
Question:
16. equation for interest calculation
Answer:
Interest = Principal x Rate X Time (yr)
if time is given in months do (months/12)
Question:
17. assets = liabilities +
Answer:
equity
, Question:
18. Debt to Equity Ratio
Answer:
Indicates how much debt a company is using to finance its assets
Ratio below 1 is great. Typically between 1-2
Question:
19. what is FICA tax
Answer:
mandatory U.S. federal payroll tax that funds the Social Security and Medicare programs (7.65%)
Question:
20. do employees and employers pay the FICA tax
Answer:
yes BOTH do
Question:
21. quick ratio (quick assets ratio)
Answer:
quick assets/current liabilities
does not include inventory; more liquid
ratio >1 indicates greater short term financial strength
Question:
22. when to file construction lien
Answer:
90 days of being on job site
once lien placed, 1 yr to commence lawsuit
Question:
23. Board Composition
Answer:
9 voting members 6 have license (4 builders, 2 M&A) 2 general public 1 building inspector
Question:
24. who appoints director and members of board
Answer:
governor with advice and consent of senate
term is 4 years
Question:
25. how often must board meet annually
Answer:
2 times per year
Question:
26. in regards to forklift truck scaffolds, do they need to be secured to the fork lfit
BUSINESS/LAW UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Question:
1. Direct and indirect expenses
Answer:
direct - material, delivery, labor indirect - equipment, repairs, rent, insurance
Question:
2. what is act 227
Answer:
home solicitation act
Question:
3. does it regulate sale of good or services for more than $25
Answer:
YES
Question:
4. how does act 227 prevent misleading or false statements
Answer:
fine of not more than 6 months or $500, or both
Question:
5. what is act 227, cancellation window
Answer:
3 days
Question:
6. what are minimum taxes owed that require you to file taxes
Answer:
$1000 federal $500 state
Question:
7. fixed asset to net worth ratio
Answer:
measures solvency. >75% is not good
fixed assets/net worth
Question:
8. what is typical overhead mark up
Answer:
varies per company but 20%-40% roughly
,Question:
9. what is typical profit mark up
Answer:
10-20% but also varies per company
Question:
10. a complaint is filed by
Answer:
the department
Question:
11. what is promulgating of code
Answer:
updating and adopting
Question:
12. The director of the construction code commission sole statutory authority is to
Answer:
enforce code
Question:
13. types of construction bonds
Answer:
bid - will enter contract if wins bid performance - will complete work payment - will pay subcontractors
Question:
14. how quick to notify MIOSHA of fatality
Answer:
8 hours
Question:
15. when do you need a toe board
Answer:
danger of tools falling from scaffold above
Question:
16. equation for interest calculation
Answer:
Interest = Principal x Rate X Time (yr)
if time is given in months do (months/12)
Question:
17. assets = liabilities +
Answer:
equity
, Question:
18. Debt to Equity Ratio
Answer:
Indicates how much debt a company is using to finance its assets
Ratio below 1 is great. Typically between 1-2
Question:
19. what is FICA tax
Answer:
mandatory U.S. federal payroll tax that funds the Social Security and Medicare programs (7.65%)
Question:
20. do employees and employers pay the FICA tax
Answer:
yes BOTH do
Question:
21. quick ratio (quick assets ratio)
Answer:
quick assets/current liabilities
does not include inventory; more liquid
ratio >1 indicates greater short term financial strength
Question:
22. when to file construction lien
Answer:
90 days of being on job site
once lien placed, 1 yr to commence lawsuit
Question:
23. Board Composition
Answer:
9 voting members 6 have license (4 builders, 2 M&A) 2 general public 1 building inspector
Question:
24. who appoints director and members of board
Answer:
governor with advice and consent of senate
term is 4 years
Question:
25. how often must board meet annually
Answer:
2 times per year
Question:
26. in regards to forklift truck scaffolds, do they need to be secured to the fork lfit
