The residual approach of determining a standalone price for a good or service focuses on internal factors by forecasting costs and adding an appropriate profit margin.

Question

Quizplus · Accepted Answer

The residual approach determines a standalone price by subtracting the sum of observable standalone selling prices of other goods or services in a contract from the total transaction price, not by forecasting costs and adding a profit margin.

The Residual Approach of Determining a Standalone Price for a Good