The formula for calculating the bonding cost is based on which of the following?

The formula for calculating the bonding cost is primarily based on a graduated scale. This means that the cost of bonding may vary depending on specific factors related to the project, such as the size, complexity, and risk associated with the contract. A graduated scale allows for a more nuanced assessment of the bonding requirements, ensuring that the cost reflects the unique aspects of each project rather than applying a flat rate or a simple formula.

In practice, this can mean that larger or more complex projects may incur higher bonding costs due to increased risk and potential financial exposure. By using a graduated scale, bonding agencies can more accurately align the bonding fees with the actual needs and circumstances of the contracting work, which helps both contractors and sureties manage their financial risks effectively.