Cost Plus Contract.

Q82. Write short notes on cost plus contract.
Ans. Under cost plus contract, the contract price is ascertained by adding a percentage of profit to the total cost of work. Such type of contract are entered into when it is not possible to estimate the contract cost with reasonable accuracy due to unstable condition of material, labour, services.

Advantages:

  1. The contract is a assured of a fixed percentage of profit. There is no risk of incurring any loss on the contract. Read More …