Which of the Following Is True for Franchisors

question 138

Multiple Choice

Which of the following is true for franchisors?

• A) The franchisor has to pay the franchisee to be part of the franchise system.
• B) The franchisor licenses the trade mark from the franchisee.
• C) The franchisor must change its operations to suit those of the franchisee's.
• D) The franchisor collects royalty payments from the franchisee.
• E) The franchisor pays start-up costs for the franchisee.

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Definitions:

Variances

Differences between planned, budgeted, or standard costs and actual costs, used in performance measurement and control.

Standard Cost

A predetermined cost of manufacturing, delivering, or producing goods under normal conditions.

Standard Cost System

An accounting system that estimates the cost of products in advance, using standard rates for materials and labor.

Direct Labor-Hours

The hours worked by employees directly involved in manufacturing goods, which is used as a basis for assigning labor costs to products.