Isla Is Starting a Medical Consulting Business That She'll Own

question 75

Multiple Choice

Isla is starting a medical consulting business that she'll own and operate by herself. She wants to ensure that making decisions about the business will be fast and easy. Which form of business should she most likely choose?

• A) sole proprietorship
• B) corporation or joint venture
• C) joint venture or syndicate
• D) LLP or corporation

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Definitions:

Gross Margin

The financial metric representing the difference between revenue and the cost of goods sold, divided by revenue, often expressed as a percentage. It indicates how efficiently a company is using its resources to produce goods.

Contribution Margin

Contribution margin is the revenue remaining after deducting variable costs, used to cover fixed costs and profit.

Variable Cost

Costs that change in proportion to the level of goods or services that a business produces.

Variable Costing

A pricing approach that incorporates only variable production expenses—such as direct materials, direct labor, and variable manufacturing overhead—into the cost of products.