ABCC-Test 1 Flashcards
What is the definition of Price Related factors?
Adjustments required by law or regulation in order to complete price evaluation
What is a Fixed Cost?
A cost that does not change due to production
What is a Variable Cost?
A cost that fluctuates
What is a Semi-Variable Cost?
A cost that has a fixed portion and a cost that fluctuates
What is FAR part 31?
Cost Principles
What are the approaches that are commonly used in determining price?
Cost-Plus (Penetration) Pricing
Demand (Skimming) Pricing
Rule-of-Thumb (Myopic) Pricing
By-In (Foot-in-the-Door) Pricing
When would it be appropriate to use a cost analysis?
If certified cost or pricing data is required (When TINA applies)
What is the definition of Cost Analysis?
The review and evaluation of the separate cost elements and proposed profit/fee of an offeror’s certified cost and pricing data or data other than certified cost and pricing data
When is Cost Realism Analysis required?
Cost Type Contracts
When is Price Analysis required?
Every Time
If certified cost or pricing data is NOT required (TINA does not Apply)
Who prepares an Independent Government Estimate (IGE)?
Normally prepared by the requiring activity
What is the definition of allocable cost?
A cost is allocable if it is assignable or chargeable to one
or more cost objectives on the basis of relative benefits
received or other equitable relationship. Subject to the foregoing, a cost is allocable to a Government contract if it—
(a) Is incurred specifically for the contract;
(b) Benefits both the contract and other work, and can be
distributed to them in reasonable proportion to the benefits
received; or
(c) Is necessary to the overall operation of the business,
although a direct relationship to any particular cost objective
cannot be shown.
What is the definition of allowable cost?
A cost is allowable only when the cost complies with
all of the following requirements:
(1) Reasonableness.
(2) Allocability.
(3) Standards promulgated by the CAS Board, if applicable, otherwise, generally accepted accounting principles and practices appropriate to the circumstances.
(4) Terms of the contract.
(5) Any limitations set forth in this subpart.
What is the definition of reasonable cost?
A cost is reasonable if, in its nature and amount, it does
not exceed that which would be incurred by a prudent person in the conduct of competitive business.
What is the definition of Indirect Cost?
Any cost not directly identified with a single final cost objective, but identified with two or more final cost objectives or with at least one intermediate cost objective
