With a(n) _____ contract, the buyer pays the supplier for allowable performance costs plus a fixed fee payment usually based on a percentage of estimated costs.Group of answer choicesFixed-price incentive fee (FPIF)Cost plus award fee (CPAF)Cost plus fixed fee (CPFF)Cost plus incentive fee (CPIF)

From the buyer’s perspective, the _____ is the least desirable among all contracts because the supplier has no incentive to decrease costs.Group of answer choicesCost plus fixed fee (CPFF)Cost plus incentive fee (CPIF)Cost plus award fee (CPAF)Cost plus percentage of costs (CPPC)

_____ contracts involve payment to the supplier for direct and indirect actual costs and often include fees.Group of answer choicesCost-reimbursableFixed-price incentive feeLump sumFirm-fixed-price

For make-or-buy decisions, relevant costs include:Group of answer choicesdifferential costs plus fixed costsincremental costs plus differential costsincremental costs plus sunk costsincremental costs plus opportunity costs

Question 461 ptsCosts that vary depending on the number of units produced or sold are referred to as fixed costs.Group of answer choicesfalsetrue PreviousNext

In a principal/agent relationship for contracts with customers, the pre-determined fee or commission for services is earned by the:Group of answer choices