Cost Estimating Relationships P 243 Unit 2 Lesson 6 P247 R F V P Total Revenue

# Cost estimating relationships p 243 unit 2 lesson 6

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Independent variables are not dependent in themselves. Cost Estimating Relationships P. 243 Unit 2 Lesson 6 P.247 R = F + V + P Total Revenue = Fixed Cost + Variable Cost + Profit C = F + V Total Cost = Fixed Cost + Variable Cost C = F + V U (Q) Total Cost = Fixed Cost + Variable Cost per unit (Quantity Produced) F = C - V u (Q) Fixed Cost = Total Coat - Variable Cost per unit (Quantity Produced) V u = C2 – C1 Variable Cost : V u = Total Cost at Point 2 - Total Cost at Point 1 Q2 – Q1 Total Quantity at Point 2 - Total Quantity at Point 1 o C = Total Cost o F = Fixed Cost o V = Variable Cost o Q = Quantity Produced o V u = Variable Cost per unit Unit 2 Lesson 7 P. 273 R u (Q) = F + V u (Q) + P * Cup Equation
Profit = Ru (Q) - F - Vu (Q) * Solve for profit Ru (Q) = F + Vu (Q) + Profit * Break Even Point Profit is = to 0 CI = (R u – V u) (Q) * Contribution Income o P = Profit o R = Total Revenue o Ru = Revenue Per Unit o CI = Contribution Income Break even Capacity = Break even Quantity / Maximum production Quantity P. 273 Unit 3 Lesson 1 Cost Reimbursement Family P.329 Cost Profit/Fee Analysis o P.331 o Fixed-Price with Award Fee: Used to motivate contractors for aspects of performance that cannot be measured objectively o Time and Materials is the least preferred contract type o CPIF and FPIF elements and differences P. 341 Unit 3 Lesson 2 Customary Progress Payment Rates P.398 o DFARS 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 concerns Total payments are capped at 80% of contract price for all business types. o FAR Large Business 80% and 85% Small Business Progress Payments appropriate P.397

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