The Two Items That Must Be Estimated with Respect to a Plant

question 89

Short Answer

The two items that must be estimated with respect to a plant asset to properly allocate cost to the affected accounting periods are ____________________ and ____________________.

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Definitions:

Price Setting

The process by which a company decides on the selling price of its products or services.

Identical Products

Goods that are exactly the same in every feature and aspect, making them perfect substitutes for one another.

Economic Profits

Total revenues minus total costs, where total costs include both explicit and implicit costs.

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and products that are similar enough to be interchangeable.