Cost-plus contracts
A)refers to contracts that are modified from their original terms during the course of the contract.
B)refers to contracts where the contractor is not expected to recover all costs incurred in completing the project.
C)are only used in countries where IFRS rules are followed.
D)are those for which the contractor is reimbursed for allowable or otherwise defined costs plus a profit markup.

Question

Quizplus · Accepted Answer

Cost-plus contracts are contracts in which the contractor is reimbursed for allowable or otherwise defined costs plus a profit markup. This type of contract is commonly used in construction and government contracting. It is not modified from its original terms during the course of the contract and is not limited to countries that follow IFRS rules. Option B is incorrect because the contractor is expected to recover all allowable costs plus a profit markup.

Cost-Plus Contracts