Question
Point of total assumption. As previously mentioned, MYH is outsourcing the development of the system. For this question, assume that a Fixed Price Incentive fee
Point of total assumption. As previously mentioned, MYH is outsourcing the development of the system. For this question, assume that a Fixed Price Incentive fee contract is being used. The target cost is estimated at 150K and the target fee is 25K. Assume the development has already occurred and the final costs came in at $225K. Because the seller's costs came in higher than target, the seller shares in the added costs: 70% to the buyer and 30% to the seller. Calculate the final price (amount paid by the buyer) and point of total assumption. Pay attention to the ceiling.
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