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 +5 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. BondsEnvironmental compliance: Clean Water Act NPDES stormwater permit for construction sites (NASCLA jobsite safety and environmental factors)
Payroll and Payroll Taxes 5 Q · 10%
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 6 Q · 12%
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 is the cost of doing business that cannot be linked to a specific project (office rent, accounting and legal fees, taxes, telephone, administrative labor), while project overhead is job-specific (bonds, temporary storage/office, security, utilities, dumpsters, portable toilets).

NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Add Company Overhead section (Page 6-6)
Bid peddlingvsBid shopping

In bid peddling the subcontractor approaches the general contractor after award offering to lower the price submitted on bid day; in bid shopping the general contractor approaches other subcontractors to undercut submitted bids.

NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Bid Peddling section (Page 6-2)
MediationvsArbitration

A mediator is a trained negotiations professional who facilitates dialogue toward a mutual agreement but renders no binding decision, while an arbitrator acts as a judge and renders a decision legally binding on all parties.

NASCLA Contractors Guide (14th ed.), Chapter 7 — Alternative Dispute Resolution section
AddendumvsChange order

An addendum communicates changes to the bid package before bids are due (prior to contract award) and becomes part of the bid documents and contract, while a change order is a written agreement between owner and contractor modifying the contract after it is signed and executed.

NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Bid Documents section (Page 6-1)
Cash methodvsAccrual method

The cash method records income when cash is received and expenses when paid; the accrual method recognizes income when services occur and expenses when incurred regardless of cash flow, and is used by most construction businesses.

NASCLA Contractors Guide, Financial Management chapter — Accrual Method section
Bank letter of creditvsSurety bond

A bank letter of credit is not a bond but a cash guarantee to the owner that is not a guarantee of performance and customarily covers only 5 to 10 percent of the contract, unlike a performance bond usually set at 100 percent of the contracted price.

NASCLA Contractors Guide (14th ed.), Chapter 3 – Bond Language section
Named peril builder's risk insurancevsAll-risk builder's risk insurance

Named peril policies have narrower coverage and cover only the perils specified in the policy (typically fire and lightning, and possibly wind, explosion, water damage, terrorism or earthquake), whereas all-risk is broader.

NASCLA Contractors Guide (14th ed.), Chapter 3 (Managing Risk) — Named Peril Builder's Risk Insurance section
Unit price methodvsQuantity take-off method

The unit price method bundles all cost factors (labor, materials, equipment, subcontractors) into one unit price for the entire task, while quantity take-off estimates each component individually.

NASCLA Contractors Guide, Bidding and Estimating chapter — Other Methods of Estimating section
Square-foot methodvsConceptual estimate

The square-foot method multiplies project square footage by a unit cost for a quick early-stage estimate but does not account for project specifics, while a conceptual estimate is generally prepared by the architect using cost models from previous projects.

NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Other Methods of Estimating section (Page 6-7)
Free float timevsTotal float time

Free float is the time an activity can be delayed without impacting the early start of the next activity; total float is the leeway allowed without delaying the overall project completion date.

NASCLA Contractors Guide (14th ed.), Chapter 8 — Float Time section
Bar chart / calendar schedulingvsCritical path method

Bar chart and calendar scheduling do not show the interdependencies of activities or the impact of a delayed task on other tasks; the critical path method addresses that limitation.

NASCLA Contractors Guide (14th ed.), Chapter 8 — Bar Chart Scheduling section
SuperintendentvsForeman

The superintendent is the onsite supervisor over all daily operations (coordinating activities, tracking schedule and cost deviations, punch lists, records), while a foreman supervises specific areas by trade such as rough carpentry or concrete installation; certifying progress payments belongs to the architect or engineer, not either role.

NASCLA Contractors Guide (14th ed.), Chapter 8 — Foreman section
Direct costsvsOperating (indirect) expenses

On the income statement direct costs are linked to a particular project (materials, subcontractor fees, permit fees, labor), while office salaries, advertising and warehouse rental are operating/indirect expenses.

NASCLA Contractors Guide (14th ed.), Chapter 2 — Income Statement section

Key Terms

Addendum NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Bid Documents section (Page 6-1)
A document issued when changes are made to a bid package before bids are due; it becomes part of the bid documents and ultimately part of the awarded contract.
Bid rigging NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Bid Rigging section (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.
Bid peddling NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Bid Peddling section (Page 6-2)
An unethical practice in which a subcontractor approaches the general contractor after award intending to lower the price originally submitted on bid day.
Pre-bid meeting NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Bid Documents section (Page 6-1)
A meeting to discuss project specifications and changes to the bid package that may be scheduled, especially (but not only) for larger projects.
Allowance NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Add Allowances section (Page 6-5)
An amount included in the estimate as the owner's budget for items not specified in the plans (such as fixtures and lighting); if the owner's choices exceed or fall short of it, a change order is created stating the amount under or over the contract.
Distribution code NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Job Cost Recording System section (Page 6-8)
The one-letter code placed behind the activity classification code identifying the type of cost — Material (M), Labor (L), Equipment (E), Project Overhead (P) — e.g., 06200L for finish carpentry labor.
CSI MasterFormat NASCLA Contractors Guide (14th ed.), Pages 6-3 and 6-8
A Construction Specifications Institute classification system of numbers and job tasks grouped by major construction activities; using it on both estimates and cost records makes comparing estimated to actual costs easier.
Preliminary estimate NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Preliminary Estimates section (Page 6-7)
A risky practice of quoting a price to a customer before accurate calculations can be made — too high may lose the bid, too low may disappoint the customer.
Markup NASCLA Contractors Guide (14th ed.), Bidding and Estimating chapter — Add Markup section (Page 6-7)
An amount applied to the direct costs of a project (labor, material, project equipment, project overhead, subcontractors); if too low the contractor may not cover project costs and will eventually go out of business.
Material breach NASCLA Contractors Guide (14th ed.), Chapter 7 — Breach of Contract section
A serious violation of the contract — such as an owner refusing to pay for completed or partial work or a contractor refusing to perform — that may void the contract and most likely ends in litigation, with the injured party able to seek monetary damages.
Indemnification NASCLA Contractors Guide (14th ed.), Chapter 7 — Provisions to Limit Risk section
A risk-limiting contract provision that absolves the indemnified party from payment for losses and damages incurred by a third party by shifting liability to the other contracting party.
Project manual NASCLA Contractors Guide (14th ed.), Chapter 7 — Contract Documents and Project Manual section
A central location for bid documents, contract provisions, technical specifications, and addenda.
Change order NASCLA Contractors Guide (14th ed.), Chapter 7 — Making Changes to the Contract section
A written agreement between owner and contractor changing the contract after it has been signed and executed (post-award changes are modifications).
Accrual method NASCLA Contractors Guide (14th ed.), Chapter 14 — Accrual Method section
An accounting method recognizing income when services occur rather than when money is collected and recording expenses when incurred rather than when paid; used by most construction businesses.
Income statement NASCLA Contractors Guide (14th ed.), Chapter 13 — Income Statement section
Also called the profit-and-loss statement, a summary of revenues minus cost of goods sold and expenses over a period of time showing gross profit and net income; it supplies the overhead and revenue figures used to calculate a company overhead percentage.
Posting / general ledger NASCLA Contractors Guide (14th ed.), Chapter 13 — Post Transactions section
Posting is transferring transactions recorded in the journals to the appropriate accounts, which are located in the general ledger.
Inland marine insurance NASCLA Contractors Guide (14th ed.), Chapter 3 — Inland Marine/Equipment Theft Insurance section
A type of property insurance purchasable for tools and equipment that covers goods in transit and projects under construction; an equipment floater is one type of it.
Motor truck cargo insurance NASCLA Contractors Guide (14th ed.), Chapter 3 (Managing Risk) — Transportation Floater and Motor Truck Cargo Insurance section
A type of inland marine insurance protecting the transporter — including contractors hauling equipment or materials to and from the jobsite — against damaged or lost freight.
Contractor's protective public and property damage liability insurance NASCLA Contractors Guide (14th ed.), Chapter 3 (Managing Risk) — Other Types of Liability Insurance section
Supplemental coverage protecting contractors who supervise subcontractors and are held liable for the subcontractors' actions causing personal injury or property damage, addressing exclusions in a standard CGL policy.
Prime contractor liability (Title 85A §36(A)) Oklahoma Workers' Compensation Act, Title 85A, Section 36(A)
Under Oklahoma workers' compensation law, if a subcontractor fails to secure required coverage the prime contractor is liable for compensation to that subcontractor's employees unless an intermediate subcontractor has workers' compensation coverage.
Workweek (FLSA) NASCLA Contractors Guide (14th ed.), Chapter 10 — Fair Labor Standards Act section
A period of 168 hours during seven consecutive 24-hour periods, which may begin on any day and hour established by the employer.
FUTA (Federal Unemployment Tax) NASCLA Contractors Guide (14th ed.), Chapter 14 — Federal Unemployment Tax (FUTA) section
A tax paid solely by the employer and reported on Form 940, where timely payment of state unemployment tax earns an offset credit and deposits under $500 may be carried forward to the next quarter.
Value engineering NASCLA Contractors Guide (14th ed.), Chapter 8 — Value Engineering section
A project management approach whose objective is to understand the owner's cost, quality, and time priorities to deliver a product of the highest value, often with owner incentives such as bonuses for cutting costs without sacrificing quality.
Just-in-time (JIT) delivery NASCLA Contractors Guide (14th ed.), Chapter 8 — Just-In-Time section
Timing material deliveries to arrive as needed in the construction process, keeping inventory costs low and reducing risk of theft or vandalism.

Formulas to Know

Bid price including overhead (overhead division method)Bid price = Direct costs ÷ (100% − project overhead % − company overhead %); e.g., $100,000 ÷ 0.80 = $125,000; $200,000 ÷ 0.80 = $250,000; $90,000 ÷ 0.75 = $120,000
Company overhead percentageTotal overhead costs from the previous year (administrative expenses on the income statement) ÷ revenues (income statement)
Total material cost per category on a take-off sheetPrice per Unit × Number of Units Needed = Total Material Unit Cost; e.g., $4.50/board foot × 800 board feet = $3,600
Owned equipment unit cost and project equipment costUnit cost = total yearly equipment cost ÷ estimated hours of use per year; Project cost = unit cost × project hours (e.g., $12,000 ÷ 600 = $20/hr; $30,000 ÷ 1,000 = $30/hr × 60 hr = $1,800; $45,000 ÷ 1,500 = $30/hr × 60 hr = $1,800)
Liquidated damagesPer-day rate × number of days late (e.g., $400 × 30 = $12,000; $500 × 20 = $10,000); an owner suing for liquidated damages cannot also sue for actual damages
Percentage of completion earningsProject Costs Incurred ÷ Total Estimated Costs = % complete; % complete × Contract Amount = cumulative earnings (e.g., $300,000 ÷ $1,000,000 = 30%; 30% × $1,500,000 = $450,000)
Straight-line depreciation(Initial cost − salvage value) ÷ useful life in years (e.g., ($24,000 − $4,000) ÷ 8 = $2,500 per year)
Net payNet Pay = Gross Pay − all taxes and deductions (e.g., $1,800 − ($215 + $111.60 + $26.10 + $95) = $1,352.30; 40 hr × $20 = $800 gross − $198 = $602)
Debt ratioTotal Debt ÷ Total Assets (e.g., $204,900 ÷ $274,600 ≈ 0.75 or 75% of funds provided by creditors); keep relatively low
Liquidity (current) ratioCurrent Assets ÷ Current Liabilities (e.g., $26,400 ÷ $8,200 ≈ 3.22); greater than one indicates a positive liquidity position
Profitability ratio (profit margin)Net Income ÷ Revenues (e.g., $46,300 ÷ $545,600 ≈ 8.5%); higher percentage means more profitable performance
Trade credit discount terms '2/10 EOM'2% discount if paid within 10 days after the end of the month of the invoice date (March 15 invoice → pay by April 10); discount = 2% × invoice ($5,000 × 2% = $100)
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