A Franchisor Benefits by Enabling a Rapid Expansion of His

question 14

True/False

A franchisor benefits by enabling a rapid expansion of his or her business, while maximizing the funds invested in that expansion.

---

Definitions:

Variable Administrative Expense

Costs that vary with changes in the level of an organization's activity, related to administrative functions.

Contribution Margin

The revenue remaining after subtracting variable costs, which can then be used to cover fixed expenses and provide profit.

Incremental Manufacturing Cost

The additional cost associated with manufacturing one more unit of a product, encompassing additional materials, labor, and overhead costs.

Fixed Cost

Costs that remain unchanged regardless of the level of production or sales activities within a certain range and period.