Hello,

I have  solved question from a leading PMP book.

Your company has a cost plus incentive fee contract with the vendor. The contract has the target cost of $200,000 and a target fee set at 25% of the total. If the target price is $300,000, the share ratio  between buyer and the vendor is set at 70/30. and the actual cost of the contract is $350,000. How much does the vendor make on this contract?

solution:

Find the incentive:

Incentive= (Target cost-actual cost)x vendor share percentage