The target cost of a fixed price contract is $50,000. The price of the contract is...
The target cost of a fixed price contract is $50,000. The price of the contract is targeted at $75,000 with a ceiling price of $100,000. The share ratio is 80/20. What is the Point of Total Assumption of this procurement?
$100,000
$125,000
$81,250
$112,500
Homework Answers
Answer:$81,250
Explanation: target cost= 50,000
triget price= 75,000
ceiling price= 100,000
buyer share ratio= 0.80
PTAPoint of Total Assumption = ((Ceiling Price – Target Price) / Buyer’s Share Ratio) + Target Cost
PTA= ((100000 – 75000) / 0.8) + 50000 = $81,250
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