Your professor moonlights to make ends meet during the summer months and has a knack for painting houses.You agree to pay $500 over whatever the materials and equipment rental cost for the job and delight in sipping lemonade in the shade watching your poor professor perform under a(n):
A)Cost-plus contract.
B)Lump-sum contract.
C)Time and material contract.
D)Fixed wage contract.

Question

Quizplus · Accepted Answer

In a cost-plus contract, the contractor is paid for their actual costs (materials and equipment rental) plus a percentage or fixed fee, which in this case is $500. This type of contract is often used when the contractor, in this case, the professor, has a unique skill or expertise that is not easily quantifiable beforehand, which would make it difficult to set a fixed price. Additionally, the cost-plus contract provides an incentive for the professor to work diligently and efficiently as doing so will result in a higher profit.

Your Professor Moonlights to Make Ends Meet During the Summer