Standard Cost Is the Industry Average Cost for a Particular

question 189

True/False

Standard cost is the industry average cost for a particular item.

Incorporate one-time expenses and their timing into capital budgeting projects.

Evaluate decisions based on the after-tax discount rate and discount factors.

Assess the impact of equipment's useful life and salvage value on the project's value.

Identify the incremental sales and cash operating expenses related to a project.

---

Definitions:

Perfectly Competitive

An economic model where numerous buyers and sellers exist, there's unrestricted entry and exit, and the product offered is uniform.

Market Price

The present cost at which a product or service is available for purchase or sale in the marketplace.

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Industry Supply

The total output of goods or services that firms in a specific industry are willing and able to sell at various prices, over a certain period.