Remember this: B/S!

Buyer/Seller....thats it! The buyer ratio on the left, the seller on the right. Thats ALWAYS how it is, unless otherwise specified in the question- this is a contracting standard. If your calculating the cost for the buyer, use the left side, for the seller/vendor/contractor use the right. Since we are calculating the seller or vender cost, use the left.

1) $300K-$275K = $25K Target cost - Actual Cost. We want to see how shitty or awesome the vendor/contractor/sellor performed vs the target or goal cost to find out their fee that they get paid.

2) .20 x $25K = $5K Seller Share ratio x amount seller is above or below the target or goal cost. 

3) $5K + $30K = $35K in profit. 10% of 300K is 30K (the 30K is the target fee...fee is also profit, just called fee went dealing with a cost type contract). Add the $5K to the $30K, and boom! Thats the fee amount.

4) $275 + $35K = $310K In a cost contract, you pay the contractor for all applicable costs incurred (unless there is a stated not to exceed NTE cost), PLUS the fee. In a CPIF contract, as above, we calculate fee as done in steps 1 through 3, after performance is over, or at specified milestones.

The total amount the contractor will be paid is $310K, $35K of which is the fee, and the $275K is the vendors incurred cost.

Some notes for everyone:

-In a cost type contract (CPFF, CPIF, etc), you pay the contractor for all costs actually incurred, PLUS the fee.

-In a CPFF contract, the fee is based on a % of the original estimate

-In a CPIF contract, the fee is simply calculated based on a share ratio and the target cost, which is then added to the target fee. If the seller goes over aka they perform shitty, then that amount will just be a negative figure. For example if the vendor had actual costs of $310K, then you would do $300K - $310K, and it would be -$10K, then -$10K x .20 = -2K, then add to $30K, and the amount of fee is $28K...Finally add that to the $275K, and boom you have a total cost.

-PTA IS ONLY FOR FPIF CONTRACTS!! Not CPIF. "Ceiling price" only applies to FPIF contracts also.

-Sometimes CPIF contracts will have a min and a max fee, to limit the end fee amount paid. Only applies to CPIF.

-Any other contracting questions let me know.....I got you!

By the way, I had NO contracting math questions on the actual PMP exam, and I HIGHLY doubt you will too. So do not sweat it to much. You are better off understanding when to use what contract type...prob 8-15 questions on the exam about when to use what contract type.