Terms and Definitions another way to look at it…

Cost Recovery Rate aka Surcharge = Cost to Operate + DoD Cost Adjustments

Sales Base

Customer Price = Materiel Cost + Surcharge

in other words

Customer Price = Cost of stuff + Cost to Operate + DoD Cost Adjustments

(Current Year Sales + Budgeted Inflation) @ Next year’s price

– Current Year Sales + Actual Inflation) @ Current Year Price

= Customer Price Change

Small piece of the pie

The Whole Pie!

Customer Budgets

are based

on this

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