Exam Cheat Sheet · Quick Reference

Oklahoma Roofing Business and Law

Oklahoma  ·  PSI Services Contractor

Verified, not estimated. Every figure below is drawn from the official exam structure we maintain — question counts, passing standard and topic weighting. Practice questions are grounded in the source law with statute citations. We omit any figure we can't verify rather than guess at it.
Total questions
50
Passing score
70%
Exam time
120 min
Administered by
PSI Services Contractor
Format
Reference materials allowed

Oklahoma State Portion 50 questions

Bidding and Estimating 10 Q · 20%
Quantity take-off method and cost componentsLabor cost calculation and labor burdenOverhead calculation and markup for profit marginBid documents and bid submission requirementsEthics in bidding (bid shopping, peddling, and rigging)Estimating methods comparison (square-foot, unit price, conceptual)Estimating pitfalls and accuracy best practicesJob cost recording system and cost code structurea. General Estimatingb. Bid
Project Management and Supervision 7 Q · 14%
Scheduling methods: calendar, bar chart, and critical path method (CPM)Scheduling process: task sequencing, activity duration, contingency time, and float timeProject manager roles and responsibilitiesProject supervisory team roles: superintendent, foreman, materials expediterTracking project progress: daily reports and status reportsBudget and cost controls: cost overruns and job cost trackingScheduling and cash flow managementQuality assurance and value engineeringa. General Project Oversightb. Oversee Budgetc. Oversee Quality Controld. Oversee Materials Control +7 more
Contracts 5 Q · 10%
Required elements of a binding contract (offer, acceptance, consideration, competent parties, legal purpose)Types of construction contracts (lump-sum, unit-price, cost-plus, turnkey, fast-track)Contract provisions (price and payment terms, obligations of parties, supplemental conditions)Breach of contract (material vs. immaterial breach, liquidated damages, statute of limitations)Change orders and contract modificationsAlternative dispute resolution (negotiation, mediation, collaborative law, arbitration)Provisions to limit risk (force majeure, indemnification, warranties, differing site conditions)Subcontracting requirements and oral vs. written agreementsa. Terminologyb. Required Elements/Componentsc. Contract Typesd. Change Orders +5 more
Financial 8 Q · 16%
Accounting cycle steps and bookkeeping fundamentalsFinancial statements: balance sheet, income statement, and statement of cash flowsFinancial ratios: liquidity, quick, activity, debt, and profitability ratiosContract accounting methods: completed contract, percentage of completion, and cost comparisonCash management: accounts receivable, progress payments, and cash flowDepreciation methods: straight-line and accelerated (MACRS)Payroll accounting: gross pay, deductions, and net pay calculationsMethods of accounting: cash method vs. accrual methoda. Business OrganizationCharacteristics, Advantages, andDisadvantagesb. Business Start-up +10 more
Labor and Personnel 5 Q · 10%
Oklahoma Workers' Compensation coverage requirements and employer obligationsEmployer anti-discrimination and retaliation protections for workers' compensation claimsPrime contractor liability for subcontractor workers' compensation coverageDisability benefit types and compensation rates (TTD, TPD, PPD, PTD)Fair Labor Standards Act minimum wage, overtime, and recordkeeping requirementsProhibited interview questions and lawful hiring practicesEmployee vs. independent contractor classification under IRS guidelinesKey employment laws (ADA, Immigration and Nationality Act/Form I-9, FMLA, child labor rules)a. ADAb. Labor Standardsc. Requirements for Non-citizens and/or Nonresidentsd. Workers' Compensation +4 more
Risk Management 4 Q · 8%
Types of insurance coverage for roofing contractors (property, liability, automobile, BOP)Commercial General Liability (CGL) insurance and supplemental liability policiesWorkers' compensation insurance requirements and employer obligationsSurety bonds: types, language, and qualifying criteriaBuilder's risk insurance (all-risk vs. named peril) and subrogationFederal bonding laws: Miller Act and Construction Industry Payment Protection Act of 1999Insurance coverage requirements for subcontractorsCoverage gaps, overlaps, and employment-related insurance (unemployment, Social Security)a. Insuranceb. Bonds
Payroll and Payroll Taxes 6 Q · 12%
Federal employment tax types and employer responsibilities (FICA, FUTA, federal income tax withholding)Payroll calculation process: gross pay, deductions, and net payDeposit schedules and requirements for payroll taxes (monthly, semiweekly, daily thresholds)Federal Unemployment Tax (FUTA): liability triggers, deposit schedule, and Form 940Employer Identification Number (EIN): who needs one and how to obtain itForm W-2, W-4, and W-3 requirements: deadlines and distribution rulesPenalties for late or incorrect payroll tax depositsForm 1099-MISC reporting requirements for independent contractorsa. Taxesb. Forms and Due Dates
Licensing Requirements 5 Q · 10%
Registration requirements and application process for roofing contractorsInsurance and workers' compensation coverage requirementsRegistration fees, renewal procedures, and expiration datesCommercial and residential roofer endorsement requirements and examinationsExemptions from registration requirementsProhibited acts and penalties for operating without valid registrationReciprocity agreements and out-of-state contractor registrationGrounds for denial, suspension, or revocation of registrationRenewalRequired Insurance/Bonds

Key Distinctions

Company OverheadvsProject Overhead

Company overhead covers general business expenses (office rent, accounting fees, legal fees) that cannot be linked to a specific project, while project overhead covers project-specific indirect costs (bonds, temporary storage, dumpsters, portable toilets).

NASCLA Contractors Guide, Page 6-6
MediationvsArbitration

A mediator facilitates dialogue between parties to help them reach a mutual agreement but does NOT render a binding decision, whereas an arbitrator acts as a judge and renders a legally binding decision.

NASCLA Contractors Guide, Chapter 7 — Alternative Dispute Resolution section
Bank Letter of CreditvsSurety Bond

A bank letter of credit is a cash guarantee (not a performance guarantee) covering only 5–10% of the contract amount, while a surety bond (e.g., performance bond) guarantees performance and is typically set at 100% of the contracted price.

Chapter 3 – Bond Language section
Named Peril Builder's Risk InsurancevsAll-Risk Builder's Risk Insurance

Named peril policies cover only the specific perils listed (e.g., fire, lightning, wind), while all-risk policies provide broader coverage and are not limited to an enumerated list.

Nascla Contractors Guide 14Th, Chapter 3 (Managing Risk) — Named Peril Builder's Risk Insurance section
Bid PeddlingvsBid Shopping

Bid peddling is when a subcontractor approaches the general contractor after project award to offer a lower price, while bid shopping is when the general contractor approaches other subcontractors to undercut already-submitted bids.

NASCLA Contractors Guide, Page 6-2
Accrual MethodvsCash Method (implied)

The accrual method recognizes income when services occur and records expenses when incurred (regardless of payment timing), while the cash method (implied contrast) recognizes income and expenses only when cash is actually received or paid.

NASCLA Contractors Guide, Chapter 14 — Accrual Method section
Square-Foot Estimating MethodvsUnit Price Estimating Method

The square-foot method multiplies total square footage by a single unit cost for a quick early-stage estimate, while the unit price method bundles all cost factors (labor, materials, equipment, subcontractors) into a per-task unit price for more detailed bidding.

NASCLA Contractors Guide, Page 6-7
Bar Chart / Calendar SchedulingvsCritical Path / Network Scheduling (implied)

Bar chart and calendar scheduling methods do not show interdependencies between activities (so delays in one task do not visibly impact others), whereas network-based methods (implied contrast) do illustrate activity interdependencies.

NASCLA Contractors Guide, Chapter 8 — Bar Chart Scheduling section
SuperintendentvsForeman

The superintendent oversees all daily onsite operations across the entire project, while the foreman supervises specific areas organized by trade (e.g., rough carpentry, concrete installation).

NASCLA Contractors Guide, Chapter 8 — Foreman section
Performance BondvsMaintenance Bond

A performance bond is typically set at 100% of the contracted price to guarantee completion, while a maintenance bond is typically set at only 10% of construction cost to cover post-completion defects.

Nascla Contractors Guide 14Th, Chapter 3 (Managing Risk) — Bond Language section
Direct CostsvsOperating (Indirect) Expenses

Direct costs (materials, subcontractor fees, permit fees, direct labor) are directly linked to a specific project and appear as such on the income statement, while operating expenses (office salaries, advertising, warehouse rental) are not tied to a specific project.

NASCLA Contractors Guide, Chapter 2 — Income Statement section
Bid RiggingvsBid Peddling

Bid rigging is collusion among multiple contractors to fix the award outcome of a project, while bid peddling is a single subcontractor undercutting its own previously submitted price after the project is awarded.

NASCLA Contractors Guide, Page 6-2

Key Terms

Company Overhead Percentage NASCLA Contractors Guide, Page 6-6
Calculated by dividing total overhead costs from the prior year's income statement by total revenues; per NASCLA Contractors Guide (Page 6-6), company overhead percentages generally average between 5% and 20%.
Project Overhead NASCLA Contractors Guide, Page 6-6
Per NASCLA Contractors Guide (Page 6-6), project overhead costs are project-specific indirect costs (bonds, temporary storage, dumpsters, security, portable toilets) that typically account for 5%–10% of the total bid.
Overhead Division Method NASCLA Contractors Guide, Page 6-6
Per NASCLA Contractors Guide (Page 6-6), when overhead percentages are known, the bid price is calculated by dividing direct costs by the remaining percentage (e.g., direct costs ÷ 0.80 when combined overhead is 20%) rather than simply adding overhead on top of costs.
CSI MasterFormat NASCLA Contractors Guide, Pages 6-3 and 6-8
Per NASCLA Contractors Guide (Pages 6-3 and 6-8), the Construction Specifications Institute's MasterFormat is the recommended classification system for both estimates and job cost recording so that estimated costs can be easily compared to actual costs.
Distribution Code NASCLA Contractors Guide, Page 6-8
Per NASCLA Contractors Guide (Page 6-8), a one-letter suffix appended to an activity classification code to identify cost type: M = material, L = labor, E = equipment, P = project overhead (e.g., 06200E for finish carpentry equipment).
Just-In-Time (JIT) Delivery NASCLA Contractors Guide, Chapter 8 — Just-In-Time section
Per NASCLA Contractors Guide (Chapter 8), a materials delivery strategy that times arrivals to coincide with when materials are needed, keeping inventory costs low and reducing the risk of theft or vandalism.
Addendum NASCLA Contractors Guide, Page 6-1
Per NASCLA Contractors Guide (Page 6-1), a document issued to communicate changes made to a bid package before the bid due date; it becomes part of the bid documents and ultimately part of the awarded contract.
Federal Unemployment Tax (FUTA) NASCLA Contractors Guide, Chapter 14 — Federal Unemployment Tax (FUTA) section
Per NASCLA Contractors Guide (Chapter 14), an employer-only tax reported on Form 940; employers who pay state unemployment tax on time receive an offset credit, and deposits under $500 may be carried forward to the next quarter.
Accrual Method of Accounting NASCLA Contractors Guide, Chapter 14 — Accrual Method section
Per NASCLA Contractors Guide (Chapter 14), the method most construction businesses use, recognizing income when services occur and recording expenses when incurred, regardless of when cash is received or paid.
Cost-Plus Contract Progress Payments NASCLA Contractors Guide, Chapter 13 — Payment for Cost-Plus Contracts section
Per NASCLA Contractors Guide (Chapter 13), payments based on actual costs incurred plus a proportionate markup; if estimates are used, reconciliation must occur once actual costs are known to adjust for over- or under-payment.
Allowance NASCLA Contractors Guide, Page 6-5
Per NASCLA Contractors Guide (Pages 6-5 and Chapter 6), a budgeted amount included in an estimate for items not yet specified (e.g., lighting fixtures); if the owner's actual selections differ, a change order is issued for the difference.
Punch List NASCLA Contractors Guide, Chapter 8 — Job Completion and Closeout section
Per NASCLA Contractors Guide (Chapter 8), a list of follow-up items developed by the contractor after a post-completion walkthrough that must be addressed before the project is formally closed out.
Preliminary Estimate NASCLA Contractors Guide, Page 6-7
Per NASCLA Contractors Guide (Page 6-7), a risky practice of quoting a price to a customer before accurate calculations are completed; quoting too high may lose the bid and quoting too low may disappoint the customer.
Labor Burden NASCLA Contractors Guide, Page 6-3
Per NASCLA Contractors Guide (Page 6-3), an additional cost component added after estimating direct labor in the quantity take-off method, representing payroll taxes, insurance, and other employer costs beyond base wages.
Bid Rigging NASCLA Contractors Guide, Page 6-2
Per NASCLA Contractors Guide (Page 6-2), a form of collusion in which contractors coordinate their bids to fix the award outcome of a project; forbidden by some state statutes on public projects.
Maintenance Bond Nascla Contractors Guide 14Th, Chapter 3 (Managing Risk) — Bond Language section
Per NASCLA Contractors Guide (Chapter 3), a bond that guarantees post-completion workmanship, typically set at 10% of construction cost, compared to a performance bond which is typically 100% of the contract price.

Formulas to Know

Total Material Unit CostPrice per Unit × Number of Units Needed = Total Material Unit Cost
Equipment Unit Cost per HourTotal Annual Equipment Operating Cost ÷ Estimated Annual Hours = Cost per Hour
Project Equipment Cost for BidEquipment Cost per Hour × Hours Needed on Project = Project Equipment Cost
Bid Price Using Overhead Division MethodDirect Costs ÷ (1 − Combined Overhead %) = Bid Price (before profit markup)
Company Overhead PercentageTotal Overhead Costs (prior year) ÷ Total Revenue (prior year) = Company Overhead %
Unit Price Method Total CostUnit Price × Total Units (e.g., sq ft) = Total Estimated Cost
Markup Applied to Direct CostsDirect Costs × (1 + Markup %) = Bid Price Including Profit
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