Allowance

Allowance

• A. Alternate
• B. Buy-Out
• C. Allowance
• D. Addendum

Answer: (C)

In cost controls, you often see an allowance—a budgeted sum set aside for an item whose exact cost isn’t known yet. It lets you keep the project budget realistic without guessing the price for items that haven’t been specified. This is why the term that represents a money set aside for an unspecified item is the appropriate choice. An alternate is a substitute option with its own price; a buy-out is the actual purchase cost of goods or services; and an addendum is a formal modification to contract documents.

In cost controls, you often see an allowance—a budgeted sum set aside for an item whose exact cost isn’t known yet. It lets you keep the project budget realistic without guessing the price for items that haven’t been specified. This is why the term that represents a money set aside for an unspecified item is the appropriate choice. An alternate is a substitute option with its own price; a buy-out is the actual purchase cost of goods or services; and an addendum is a formal modification to contract documents.