Differentiate Between Fixed Costs and Variable Costs

question 100

Essay

Differentiate between fixed costs and variable costs.

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Definitions:

Incentive Fee Contract

A contract type that provides additional compensation to the contractor for exceeding performance targets.

Cost Reimbursable Contract

A contract where the buyer reimburses the contractor for all legitimate costs incurred plus an additional fee for profit.

Fixed Fee

A fixed fee is a pricing structure where a single set price is agreed upon for a service or project, regardless of the time or resources used.

Cost Reimbursable Contract

A type of contract where the buyer reimburses the seller for the seller's allowable costs, plus a fee representing the seller's profit.