Contractor License Practice Exam

The basic hourly wage for productive labor in a construction project is called?

1. General labor cost

2. Direct labor cost

3. Operational labor cost

4. Minimal labor cost

The correct answer is: Direct labor cost

The term for the basic hourly wage for productive labor on a construction project is known as direct labor cost. This encompasses the wages paid directly to workers who are actively involved in the construction activities, reflecting the labor costs associated directly with the production of goods or services. It's important to note that direct labor cost specifically pertains to compensation for work that can be directly traced to a project. This distinguishes it from other costs, such as overhead or indirect costs, which are not directly associated with a specific project or task but rather support overall business operations. Understanding direct labor cost is crucial for budgeting and cost estimation in construction projects, as it allows contractors and project managers to accurately assess labor expenses that will contribute to the overall cost of the project.