Cost
Submitted by MuhammadKhan74 on Tue, 08/07/2012 - 15:44
Can someone explain the following question please:
A fixed-price-plus-incentive-fee (FPI. contract has a target cost of $130,000, a target profit of $15,000, a target price of $145,000, a ceiling price of $160,000, and a share ratio of 80/20. The actual cost of the project was $150,000. How much profit does the seller make?
A. $10,000
B. $15,000
C. $0
D. $5,000
Regards,
MK
Forums:
admin
Wed, 08/08/2012 - 04:14
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should be $10KSince Ceiliing
should be $10K
Since Ceiliing cost is the max amount the client will allow which is $160000, The seller has completed for $150000 , so he can make a profit of $10000
karthik21
Wed, 08/08/2012 - 08:43
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Share ratio
Since the seller had completed the project at $150,000 instead of the Ceiling Price of $160,1000, should the $10,000 be split across based on the share ratio. ie $8000 to the Seller and $2000 to the buyer?
MuhammadKhan74
Wed, 08/08/2012 - 14:22
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Actually, 80/20 ratio is my
Actually, 80/20 ratio is my concern too. Correct answer according to the site is $10,000 but I think it should be $8,000 which is none of the available options. I am still confused.