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Independent variables are not dependent in themselves.Cost Estimating Relationships P. 243Unit 2 Lesson 6P.247R = F + V + PTotal Revenue= Fixed Cost + Variable Cost + ProfitC = F + V Total Cost= Fixed Cost + Variable CostC = F + VU(Q) Total Cost= Fixed Cost + Variable Cost per unit (Quantity Produced)F = C - Vu (Q)Fixed Cost= Total Coat - Variable Cost per unit (Quantity Produced)Vu= C2 – C1Variable Cost: Vu= Total Cost at Point 2 - Total Cost at Point 1Q2 – Q1 Total Quantity at Point 2 - Total Quantity at Point 1oC = Total Cost oF = Fixed Cost oV = Variable Cost oQ = Quantity ProducedoVu= Variable Cost per unit Unit 2 Lesson 7P. 273Ru(Q) = F + Vu (Q) + P* Cup Equation
Profit = Ru (Q) - F - Vu (Q)* Solve for profitRu (Q) = F + Vu (Q) + Profit * Break Even PointProfit is = to 0 CI = (Ru– Vu)(Q)* Contribution IncomeoP = ProfitoR = Total RevenueoRu = Revenue Per UnitoCI = Contribution IncomeBreak even Capacity = Break even Quantity / Maximum production Quantity P. 273Unit 3 Lesson 1Cost Reimbursement Family P.329 Cost Profit/Fee AnalysisoP.331oFixed-Price with Award Fee:Used to motivate contractors for aspects of performance that cannot be measured objectivelyoTime and Materials is the least preferred contract typeoCPIF and FPIF elements and differences P. 341Unit 3 Lesson 2Customary Progress Payment Rates P.398oDFARS 232.501-1 Customary progress payment rates.–(a) The customary progress payment rates for DoD contracts, including contracts that contain foreign military sales (FMS) requirements, are 80 percent for large business concerns, 90 percent for small business concerns, and 95 percent for small disadvantaged business concernsTotal payments are capped at 80% of contract price for all business types.oFAR Large Business 80% and 85% Small BusinessProgress Payments appropriate P.397