Replacing cost-based reimbursement contracts with fixed fee reimbursement contracts is one way to
A) Reduce the incentive to bias information when allocating support department costs
B) Eliminate uncertainty when allocating support department costs
C) Consider perceived fairness when allocating support department costs
D) Eliminate the need to allocate support department costs

Question

Quizplus · Accepted Answer

Fixed fee reimbursement contracts reduce the incentive to bias information because the reimbursement is not based on the reported costs, thus minimizing the motivation to manipulate cost allocations.

Replacing Cost-Based Reimbursement Contracts with Fixed Fee Reimbursement Contracts Is