Which of the following most accurately describes the expected cost plus a margin approach for transaction price allocation?

Select answer from the options below - Incorrect!

Costs of satisfying a performance obligation are forecasted and an appropriate markup for the goods or services involved is added.

The total transaction price is determined and any known stand-alone selling prices are subtracted in order to determine unknown stand-alone prices.

Costs of individual items within a bundle are compared to the stand-alone prices of those items to determine the discount, which is reflected in the individual items.

The market in which goods or services are sold is evaluated in order to estimate the price customers are willing to pay for those goods or services.