The Most Basic Contractual Pricing Mechanism Is Called A/an _____

question 34

Multiple Choice

The most basic contractual pricing mechanism is called a/an _____ contract.

• A)fixed price with escalation
• B)cost plus incentive fee
• C)firm fixed price
• D)cost-sharing
• E)fixed price with redetermination

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Definitions:

Sales Mix

The combination of different products or services that a company sells, which impacts the overall profitability.

Contribution Margin Ratio

A ratio that measures the percentage of sales revenue available to cover fixed expenses and generate profit, calculated as the contribution margin divided by sales revenue.

Annual Fixed Expenses

Expenses that do not change in total regardless of changes in the volume of activity or production levels, such as rent or salaries.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, showing how much contributes to covering fixed costs and earning profit.