When Estimated Costs Are Used in Applying the Cost-Plus Approach

question 171

True/False

When estimated costs are used in applying the cost-plus approach to product pricing, the estimates should be based on normal levels of performance.

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Definitions:

Reasonable Consumer

A hypothetical individual in legal and marketing contexts who makes purchasing decisions based on an average level of information, attention, and understanding.

Labels

Marks or pieces of information attached to an item to provide identification, usage instructions, contents, manufacture, and warning information.

Accurate

Characterized by being correct in all details; exact and precise.

Ordinary Consumer

A typical or average customer who purchases goods and services for personal use.