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

question 35

True/False

When standard costs are used in applying the cost-plus approach to product pricing, the standards should be based upon ideal levels of performance.

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Definitions:

Authorised

Officially granted permission or power to do something within a particular scope or sphere.

Contract

A contract that is legally enforceable and entered into by two or more parties.

Unenforceable

Describes a contract or provision that is null and incapable of being upheld or enforced by law.

Principal

The original sum of money borrowed in a loan, or the amount of the investment.