cost plus
/ˈkɔst plʌs/
noun
- A pricing method or contract in which the seller is paid the actual cost plus an agreed profit margin.
- The buyer was unhappy with the cost-plus because the final price was much higher than expected.
- The contractor preferred a cost-plus because it reduced their financial risk.
- Cost-plus is often used for large defense projects.
adjective
- Describing a pricing method where the seller charges the buyer for the actual cost of making a product plus an extra amount for profit.
- Under a cost-plus agreement, the company is paid for materials and labor plus a fixed fee.
- Cost-plus pricing is common in construction projects where costs are uncertain.
- The government awarded a cost-plus contract to build the new bridge.