There Are Four (4)basic Forms of Franchises: (1)trusteeship Franchise; (2)manufacturing

question 16

True/False

There are four (4)basic forms of franchises: (1)trusteeship franchise; (2)manufacturing plant franchise; (3)"chain-link" franchise; and (4)geographical franchise.

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Definitions:

Margin of Safety

The difference between actual or expected sales and the sales volume at which a company breaks even.

Fixed Costs

Rephrased: Expenses that remain constant regardless of the amount of goods or services produced by a business.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.

Budgeted Net Income

The projected net income for a future period, based on expected revenues and expenses.