NASCLA Home Improvement Salesperson Practice Exam 2025 - Free Home Improvement Salesperson Practice Questions and Study Guide

The correct answer is "Risk." Contingency markups are typically calculated based on the level of uncertainty and potential risks associated with a project. This risk assessment incorporates factors such as unforeseen events, price fluctuations, and possible changes in project scope. By evaluating the risks involved, project managers can better estimate the additional budget needed to cover unexpected costs that may arise during the project.

When risk levels are high, the contingency markup tends to be greater to provide a safety net against potential financial impacts. This practice ensures that there are sufficient funds available to address challenges without derailing the overall budget or timeline. In contrast, the other options—cost, planning, and control—do not necessarily encapsulate the primary reason for calculating contingency markups, which directly ties to managing uncertainty and potential financial implications in the project's execution.