Contracts & ExecutionQuestion 149 of 1605
A contract bids a job at a single total price covering all labor, materials, and overhead, regardless of actual cost. This is a:
a.Cost-plus-fee contract
b.Time and materials contract
c.Unit-price contract
d.Fixed-price (lump sum) contract
Explanation
A fixed-price or lump-sum contract sets one total price for the entire scope. The contractor profits if costs come in low and loses if they run high, bearing the cost risk.
Practice all 1605 questions free — no signup required.
Related questions on this topic
- A homeowner asks a contractor to begin a $15,000 kitchen remodel based only on a verbal agreement. The contractor should:
- Which practice by a contractor on a home improvement contract is PROHIBITED?
- A contractor takes a deposit, performs a small amount of work, and then stops returning calls and never finishes. This conduct is BEST described as:
- Under a cost-plus-percentage contract, the contractor's fee is calculated as:
- A grading contract pays $4.50 per cubic yard of soil excavated, with the final quantity measured in the field. This is a:
- A "guaranteed maximum price" (GMP) contract protects the owner because:
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)