Cost and Price Analysis
Cost and Price Analysis
Instructor: Name:
Class: Finance 230 Date:
Period: Results:
1) Why is it important for the government to exercise good fiscal judgment when spending funds?
Government employees are held responsible for use of good judgment so those excessive prices are not paid.
2) List and describe four types of market based pricing. Be sure to provide at least one (1) example of each type.
Competitive Offers – response to solicitation encouraging competing offers
Established Catalog Price – Published by the seller in a regularly maintained catalog or price list
Established Market Price – substantiated from sources independent of the seller: and are current sales prices established in the normal course of trade between buyers and sellers free to bargain in the market place.
Established by Law or Regulation – customers are consistently impacted by the established prices.
3) List 3 reasons that government buyers have significant advantages in getting fair and reasonable prices.
The government is the only buyer – which has a strong negotiating position on pricing.
High volume purchase – suppliers like to deal with high volume buyers and are inclined to give better prices to such buyers.
Anit-Deficiency Act - requires the government agencies have the money to pay for the contract work before signing the contract.
4) Compare and contrast cost, price and profit.
Price refers to the amount of money that consumers have to give up to acquire goods or service.
Profit is what ever monetary amount is left after all cost has been paid.
5) List and explain the two acceptable procedures for obtaining competitive prices.
Sealed Bidding - A process by which government needs are made known by a solicitation called and Invitation for Bids (IFB).
Negotiation is the contracting method that ma be used when sealed bidding is inappropriate.
Competitive Proposals A process by which government needs are made known by a solicitation called
Instructor: Name:
Class: Finance 230 Date:
Period: Results:
1) Why is it important for the government to exercise good fiscal judgment when spending funds?
Government employees are held responsible for use of good judgment so those excessive prices are not paid.
2) List and describe four types of market based pricing. Be sure to provide at least one (1) example of each type.
Competitive Offers – response to solicitation encouraging competing offers
Established Catalog Price – Published by the seller in a regularly maintained catalog or price list
Established Market Price – substantiated from sources independent of the seller: and are current sales prices established in the normal course of trade between buyers and sellers free to bargain in the market place.
Established by Law or Regulation – customers are consistently impacted by the established prices.
3) List 3 reasons that government buyers have significant advantages in getting fair and reasonable prices.
The government is the only buyer – which has a strong negotiating position on pricing.
High volume purchase – suppliers like to deal with high volume buyers and are inclined to give better prices to such buyers.
Anit-Deficiency Act - requires the government agencies have the money to pay for the contract work before signing the contract.
4) Compare and contrast cost, price and profit.
Price refers to the amount of money that consumers have to give up to acquire goods or service.
Profit is what ever monetary amount is left after all cost has been paid.
5) List and explain the two acceptable procedures for obtaining competitive prices.
Sealed Bidding - A process by which government needs are made known by a solicitation called and Invitation for Bids (IFB).
Negotiation is the contracting method that ma be used when sealed bidding is inappropriate.
Competitive Proposals A process by which government needs are made known by a solicitation called