Florida Building Contractor Exam 2026 – 190 Practice Questions
with Answers & Detailed Rationales, Business & Finance, Contract
Administration, Project Management, Florida Building Codes,
Construction Methods & Safety
SECTION 1: BUSINESS & FINANCE (Questions 1–64)
Question 1
A Florida Building Contractor is evaluating whether to operate as a sole proprietorship or a
limited liability company (LLC). Which factor is most directly addressed by choosing the LLC
structure?
A. The ability to obtain a contractor's license without a qualifying agent
B. The potential separation of personal assets from business liabilities
C. The exemption from maintaining workers' compensation coverage
D. The elimination of all state licensing examination requirements
Correct Answer: B
Explanation: An LLC may provide limited liability protection, separating personal assets from
certain business obligations. A sole proprietorship offers no such separation.
Question 2
A contractor's annual gross sales are $2,400,000. Direct job costs total $1,560,000. Operating
expenses include $320,000 in fixed overhead and $180,000 in variable overhead. What is the
contractor's operating profit before taxes?
A. $340,000
,B. $400,000
C. $520,000
D. $660,000
Correct Answer: A
Explanation: Gross profit is $840,000. Operating expenses total $500,000. Operating profit =
$840,000 − $500,000 = $340,000.
Question 3
A contractor estimates direct costs of $120,000 for a project and wants to achieve a 20%
profit margin. What should the contract selling price be?
A. $144,000
B. $150,000
C. $156,000
D. $160,000
Correct Answer: B
Explanation: A 20% margin means direct costs represent 80% of price. $120,000 ÷ 0.80 =
$150,000. Markup on cost would differ from margin.
Question 4
A contractor's annual fixed overhead is $480,000. The average contribution margin is 32% of
sales. What annual sales volume is required to break even?
,A. $1,200,000
B. $1,440,000
C. $1,500,000
D. $1,600,000
Correct Answer: C
Explanation: Break-even sales = Fixed overhead ÷ Contribution margin ratio. $480,000 ÷ 0.32
= $1,500,000.
Question 5
A contractor applies a 15% markup to direct costs of $200,000. What is the selling price, and
what is the resulting profit margin?
A. $230,000 selling price; 13.04% margin
B. $230,000 selling price; 15% margin
C. $235,000 selling price; 15% margin
D. $235,000 selling price; 17.65% margin
Correct Answer: A
Explanation: Markup: $200,000 × 1.15 = $230,000. Margin = $30,000 ÷ $230,000 = 13.04%.
Markup percentage exceeds margin percentage.
Question 6
Which financial statement reports a contractor's assets, liabilities, and equity at a specific
point in time?
, A. Income statement
B. Statement of cash flows
C. Balance sheet
D. Job cost ledger
Correct Answer: C
Explanation: The balance sheet provides a snapshot of financial position at a given date. The
income statement covers a period.
Question 7
Under the percentage-of-completion method, a contractor has incurred $400,000 in costs on
a $1,000,000 contract estimated to cost $800,000 total. What revenue should be
recognized?
A. $400,000
B. $500,000
C. $600,000
D. $800,000
Correct Answer: B
Explanation: Percentage complete = $400,000 ÷ $800,000 = 50%. Revenue recognized = 50%
× $1,000,000 = $500,000.
Question 8
with Answers & Detailed Rationales, Business & Finance, Contract
Administration, Project Management, Florida Building Codes,
Construction Methods & Safety
SECTION 1: BUSINESS & FINANCE (Questions 1–64)
Question 1
A Florida Building Contractor is evaluating whether to operate as a sole proprietorship or a
limited liability company (LLC). Which factor is most directly addressed by choosing the LLC
structure?
A. The ability to obtain a contractor's license without a qualifying agent
B. The potential separation of personal assets from business liabilities
C. The exemption from maintaining workers' compensation coverage
D. The elimination of all state licensing examination requirements
Correct Answer: B
Explanation: An LLC may provide limited liability protection, separating personal assets from
certain business obligations. A sole proprietorship offers no such separation.
Question 2
A contractor's annual gross sales are $2,400,000. Direct job costs total $1,560,000. Operating
expenses include $320,000 in fixed overhead and $180,000 in variable overhead. What is the
contractor's operating profit before taxes?
A. $340,000
,B. $400,000
C. $520,000
D. $660,000
Correct Answer: A
Explanation: Gross profit is $840,000. Operating expenses total $500,000. Operating profit =
$840,000 − $500,000 = $340,000.
Question 3
A contractor estimates direct costs of $120,000 for a project and wants to achieve a 20%
profit margin. What should the contract selling price be?
A. $144,000
B. $150,000
C. $156,000
D. $160,000
Correct Answer: B
Explanation: A 20% margin means direct costs represent 80% of price. $120,000 ÷ 0.80 =
$150,000. Markup on cost would differ from margin.
Question 4
A contractor's annual fixed overhead is $480,000. The average contribution margin is 32% of
sales. What annual sales volume is required to break even?
,A. $1,200,000
B. $1,440,000
C. $1,500,000
D. $1,600,000
Correct Answer: C
Explanation: Break-even sales = Fixed overhead ÷ Contribution margin ratio. $480,000 ÷ 0.32
= $1,500,000.
Question 5
A contractor applies a 15% markup to direct costs of $200,000. What is the selling price, and
what is the resulting profit margin?
A. $230,000 selling price; 13.04% margin
B. $230,000 selling price; 15% margin
C. $235,000 selling price; 15% margin
D. $235,000 selling price; 17.65% margin
Correct Answer: A
Explanation: Markup: $200,000 × 1.15 = $230,000. Margin = $30,000 ÷ $230,000 = 13.04%.
Markup percentage exceeds margin percentage.
Question 6
Which financial statement reports a contractor's assets, liabilities, and equity at a specific
point in time?
, A. Income statement
B. Statement of cash flows
C. Balance sheet
D. Job cost ledger
Correct Answer: C
Explanation: The balance sheet provides a snapshot of financial position at a given date. The
income statement covers a period.
Question 7
Under the percentage-of-completion method, a contractor has incurred $400,000 in costs on
a $1,000,000 contract estimated to cost $800,000 total. What revenue should be
recognized?
A. $400,000
B. $500,000
C. $600,000
D. $800,000
Correct Answer: B
Explanation: Percentage complete = $400,000 ÷ $800,000 = 50%. Revenue recognized = 50%
× $1,000,000 = $500,000.
Question 8
