ABCC-Test 2 Flashcards
What is the definition of the Break Even Point?
The point where your revenue reaches your total cost and no profit has been made
All money made after this point is Contributed Income
What is the definition of Contribution Income (CI)
Revenue beyond variable costs is “contributed” to fixed costs
Revenue beyond variable and fixed costs is “contributed” to profit
What is the definition of a Fixed Cost?
Cost that doesn’t change
What is the definition of a Variable Cost?
Cost that fluctuates
What is the definition of a Semi-Variable Cost?
Cost that is partly fixed and partly flucuates
What is an irrational pricing strategy?
When the selling price AKA Revenue per unit (Ru) is less than the Variable cost per unit (Vu)
What is the definition of a Letter Contract?
A written preliminary contractual instrument that authorizes the contractor to begin immediately manufacturing supplies or performing services
What are the elements of a Fixed-Price Incentive Fee (FPIF)(firm target) Contract?
Target cost
Target profit
Ceiling price
Profit adjustment formula
What are the elements of a Fixed-Price Incentive (FPIF)(successive targets) Contract?
Target cost Target profit Ceiling price Profit adjustment formula Production point
What are the elements of a Cost Plus Incentive Fee (CPIF)
Contract?
Target Cost/Target Fee
Sharing Formula
Minimum Fee/Maximum Fee
When is a Time & Materials Contract used?
When not possible to estimate the extent, duration and cost of the work to any reasonable degree of confidence
Use only if no other contract type possible, and only if the contract includes a ceiling price
When is a Letter Contract used?
Contingency/emergency
To begin work immediately before a price is agreed upon
What is the preferred method of financing?
Performance
What are the three methods of government financing?
Performance
Progress
Advance pay
What does a Right Skewed graph depict?
mean > median
Tail to the right
What does a Left Skewed graph depict?
mean < median
Tail to the left
What does a Bi-Modal graph depict?
More analysis is needed
More than one peak
What is the definition of Mean?
The calculated value of all the numbers divided by the number of values
Average
What is the definition of Median?
The middle value of the numbers listed in rank order
If there is an even number of values, the median is the mean of the middle two numbers
What is the definition of Mode?
The number that appears the most in the sequence of numbers
What is the definition of Range?
The difference between the highest number vs. the lowest number in the sequence
What are three types of Cost Volume Analysis?
Fixed Cost
Variable Cost
Semi-Variable Cost
What are the two types of Price Indices?
Simple index numbers
Aggregate index numbers
What is the definition of a Simple Index Number?
Index numbers that calculate price changes for a single item over time
What is the definition of an Aggregate Index Number?
Index numbers that calculate price changes for a group of related items over time
What is the equation for Cost Volume Analysis?
C = F + Vu (Q)
Cost = Fixed cost + Variable cost per unit x Quantity
What is the equation for Cost Volume Profit Analysis?
Ru (Q) = F + Vu (Q) + P
Revenue per unit x Quantity = Fixed cost + Variable cost per unit x Quantity + Profit
What is the equation for Variable cost?
Vu = C2 - C1 ÷ Q2 - Q1
Variable cost per unit = Cost 2 - Cost 2 ÷ Qty 2 - Qty 1
What is the equation for Economic Price Adjustment?
NI ÷ OI x OP = NP
New Index ÷ Old Index x Old Price = New Price
How do you determining Percentage changes between two years?
NI ÷ OI x 100 - 100 = % change
New Index ÷ Old Index x 100 - 100 = Percentage Change
