PMP Exam Set E – Q82

Which of the following statements best describes Time & Material (T&M) contracts?

A. T&M contracts are hybrid type of contractual agreements that could contain aspects of both cost-reimbursable and fixed-price type arrangements
B. T&M contracts are the best form of contracts when the scope of work and the number of hours of work for a specific resource category is clearly known.
C. T&M contracts are the same as Fixed Price contracts except that the total value is calculated using Fixed rates and the effort data is available to the purchaser as well as the seller. Once this is agreed upon, it becomes the same as a Fixed Price project.
D. T&M contracts are very risky since the value of the project is not known. It is best to go in for a fixed price (FP) contract.

A. T&M contracts are hybrid type of contractual agreements that could contain aspects of both cost-reimbursable and fixed-price type arrangements

PMP Exam Set A – Q73

A project is contracted as a Time & Material (T&M) type of contract. The service provider initially estimates that the total effort involved would be about 1000 hours of effort. The project is contracted at a rate of US$ 75 per hour of effort. If the project ended up with 1200 hours of effort, what would the contract payout be.

A. US$ 75,000
B. US$ 90,000
C. US$ 82,500
D. US$ 120,000

B. US$ 90,000