Cost-plus pricing, however, is used more specifically to refer to an agreed price between a purchaser and the seller, where the price is based on actual costs incurred plus a fixed percentage of actual cost or a fixed amount of profit per unit. Such pricing methods are often used for ...
Adj.1.cost-plus- determining payment based on the actual cost of production plus an agreed-upon fee or rate of profit; "a cost-plus government contract" indeterminate,undetermined- not precisely determined or established; not fixed or known in advance; "of indeterminate age"; "a zillion is ...
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Cost-plus pricing implies using the same desired mark-up on a large amount of products. Fundamentally, all types of pricing could be defined as being cost-plus on some level, but if the mark-up is different for all products then all the advantages of using this method are lost. Therefore...
The meaning of PRICE is the amount of money given or set as consideration for the sale of a specified thing. How to use price in a sentence.
The meaning of PRICE is the amount of money given or set as consideration for the sale of a specified thing. How to use price in a sentence.
1. Cost-plus pricing In cost-plus pricing, a business tallies its production, fixed, and operating costs, then adds an arbitrary percentage markup over cost to arrive at a price that produces a desired profit margin. In contrast to value-based pricing’s focus on the customer, cost-plus fo...
so a cost-plus contract can also be referred to as acost-reimbursement contract. This cost-plus pricing means that the contractor is paid for the true cost of the project, as determined by documented and agreed-upon expenses, instead of a fixed price. Cost-plus contracts are useful in situ...
9. (Accounting & Book-keeping) to estimate the cost of (a product, process, etc) for the purposes of pricing, budgeting, control, etc [C13: from Old French (n), from coster to cost, from Latin constāre to stand at, cost, from stāre to stand] ˈcostless adj ˈcostlessly adv...
Understanding a Cost-Plus Contract Cost-plus contracts are generally used if the party drawing up the contract has budgetary restrictions or if the overall scope of the work can't be properly estimated in advance. For example, this party could be either the project owner, who wants to encourag...