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The target cost of a fixed price contract is $50,000. The price of the contract is...

The target cost of a fixed price contract is $50,000. The price of the contract is targeted at $75,000 with a ceiling price of $100,000. The share ratio is 80/20. What is the Point of Total Assumption of this procurement?

$100,000

$125,000

$81,250

$112,500

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Answer #1

Answer:$81,250

Explanation: target cost= 50,000

triget price= 75,000

ceiling price= 100,000

buyer share ratio= 0.80

PTAPoint of Total Assumption = ((Ceiling Price – Target Price) / Buyer’s Share Ratio) + Target Cost

PTA= ((100000 – 75000) / 0.8) + 50000 = $81,250

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