In General,prices Should Not Be Based on Costs Because Consumers

question 95

True/False

In general,prices should not be based on costs because consumers make their purchase decisions based on perceived value,not the cost of production.

---

Definitions:

Activity Variance

The difference between planned or budgeted cost and actual cost in activity-based costing, indicative of operational efficiency.

Administrative Expenses

Expenses that are not directly tied to the production of goods or services, such as salaries of office workers, rent, and utilities.

Tenant-Days

A measure used in the hospitality or rental industry, referring to the total number of days that units are occupied by tenants.

Activity Variance

The difference between the budgeted cost and actual cost attributed to changes in the level of activity.