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komal
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PMP Practice Questions

Postby komal Wed Aug 23, 2017 9:09 am

A prime contractor in a customer project under CPFF contract has run into unexpected technical problems. Fixing them will require a lot of additional work to be done.

The company made a decision to book more staff and equipment from their subcontractors in order to adhere to the agreed timeline. The customer agreed to this decision.

What will most likely happen?

The contractor‘s indirect costs will increase and the customer‘s payment for them will increase, too.
The contractor‘s indirect costs will increase, but the customer‘s payment for them will not increase.
The contractor‘s indirect costs will not increase, but the customer‘s payment for them will.
Both the contractor's indirect costs and the customer‘s payment for them will not increase.
manishpn
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Joined: Sat Jan 04, 2014 3:55 pm

Re: PMP Practice Questions

Postby manishpn Wed Aug 23, 2017 5:33 pm

komal wrote:A prime contractor in a customer project under CPFF contract has run into unexpected technical problems. Fixing them will require a lot of additional work to be done.

The company made a decision to book more staff and equipment from their subcontractors in order to adhere to the agreed timeline. The customer agreed to this decision.

What will most likely happen?

The contractor‘s indirect costs will increase and the customer‘s payment for them will increase, too.
The contractor‘s indirect costs will increase, but the customer‘s payment for them will not increase.
The contractor‘s indirect costs will not increase, but the customer‘s payment for them will.
Both the contractor's indirect costs and the customer‘s payment for them will not increase.



I dont like this question much as there are possible multiple options for it.

the question challenges your knowledge about your understanding of costs and contracts

in CPFF - the seller is paid actual costs that they spent on the project plus a fixed agreed fee (which is not dependent on the cost of project)
Direct cost - are expenses that are billed directly to the project/buyer . e,g
are team wages, purchase raw material for project , costs incurred for recognition and awards for employees, etc.

Indirect cost - Indirect costs are Overhead items or costs incurred for the benefit of more than one project.
eg. taxes, fringe benefits, etc
Base on explanation and hint provided can you chose right option?
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/

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