Which of the Following Is True of Franchising

question 29

Multiple Choice

Which of the following is true of franchising?

• A) It requires little financial investment by the franchisor.
• B) It is a business operation in a foreign country that a firm fully owns.
• C) It involves creating goods within a firm's home country and then shipping them to another country.
• D) It refers to a firm purchasing an existing business from a foreign operator.
• E) It is most frequently used in manufacturing industries.

---

Definitions:

Cost Per Equivalent Unit

The cost per equivalent unit is calculated in process costing, representing the cost assigned to a single unit of production, considering both completed and partially completed units.

Equivalent Units

A concept used in process costing to standardize units of production, making it easier to assign costs in mixed production environments.

FIFO Method

An inventory valuation method that assumes items purchased or produced first are sold first, standing for "First-In, First-Out".

Equivalent Units

A term used in cost accounting to denote a conversion of partially completed goods to an equivalent number of fully completed units.