Which statement about a quotation and an estimate is true?

Which statement about a quotation and an estimate is true?

• A. A quotation is a fixed price offer for defined goods/services; an estimate is a rough calculation that may change.
• B. A quotation may change; an estimate is fixed.
• C. Both are fixed price offers for defined goods/services.
• D. An estimate is a firm contract requiring payment upfront.

Answer: (A)

The key idea is how the two terms relate to price and certainty in a sale. A quotation is a fixed price offer for defined goods or services, with clear terms and a set price that remains in force if the customer accepts within the specified period. An estimate, on the other hand, is a rough calculation of what the job might cost and is not binding; it can change as details, scope, or quantities are clarified. So the statement that best fits reality is that a quotation provides a fixed price for defined work, while an estimate is a preliminary figure that may be adjusted. The other options mix up which one is fixed or binding—quotations are not typically variable without changes in scope, and estimates are not firm contracts requiring upfront payment.

The key idea is how the two terms relate to price and certainty in a sale. A quotation is a fixed price offer for defined goods or services, with clear terms and a set price that remains in force if the customer accepts within the specified period. An estimate, on the other hand, is a rough calculation of what the job might cost and is not binding; it can change as details, scope, or quantities are clarified. So the statement that best fits reality is that a quotation provides a fixed price for defined work, while an estimate is a preliminary figure that may be adjusted. The other options mix up which one is fixed or binding—quotations are not typically variable without changes in scope, and estimates are not firm contracts requiring upfront payment.