Reference no: EM132239962
1. The purpose of the seller’s estimating process and the buyer’s cost and price analysis is to:
A. Develop an accurate, verifiable price
B. Determine if the type of contract is right
C. Develop some idea of the possible range of cost
E. None of the above
2. In pricing and estimating, important costs are:
A. Accounting costs
B. Future incremental costs
C. Direct costs
D. Overhead costs
E. All of the above
3. When a cut in price increases the quantity sold of an item so that the total revenue remains exactly the same, it is termed:
A. Elastic demand
B. Unitary elasticity
C. Inelastic demand
D. Marginal revenue
E. None of the above
4. The basic concept that underlies the cost effectiveness procedures of the Government is:
A. Demand
B. Supply
C. A just price
D. Marginal utility
E. None of the above
5. Overhead in total is:
A. Variable cost
B. Semi-variable cost
C. Fixed cost
D. All of the above
6. Any decision to buy instead of make an item means that portion of the contract:
A. Will not support the Government’s labor surplus programs
B. Will not help small business
C. Will not absorb a full share of the firm’s fixed cost
D. Will not absorb it’s full share of the corporate office’s G&A expenses
E. None of the above
7. Under any type of contract other than a firm fixed price, if the contractor’s only desire is to maximize profit:
A. He should establish a widespread cost reduction program
B. He should use only the full average cost pricing method
C. He has a built-in incentive to spend up to the ceiling
D. He must decrease the direct labor portion of his contract as much as possible
E. None of the above
8. True or False:
Selling certain products below “cost” is forbidden by the regulations.
9. True or False:
Marginal concepts are unimportant when volume drops because of termination or lack of business.
10. True or False:
Stability of output is one of the prime advantages in Government contracting.
11. True or False:
Failure to earn a “profit” on a particular contract may not necessarily be a loss if the firm had no alternative uses for the resources employed on it.
12. True or False:
In the long run a supply curve tends to become an expense or cost production curve.
13. True or False:
It is possible to take a loss on some additive work at a contractor’s facility, but contribute a profit to the facility base on the volume it adds.