Nancy Was a Partner of a Small Business

question 34

Multiple Choice

Nancy was a partner of a small business.She could see that the business was beginning to fail and that it was very unlikely it would recover.Not wanting to lose her investment,she asked that the court require the partnership to dissolve since she did not have a legal right to withdraw at that time.Does a court have the authority to order a partnership to dissolve?

• A)Yes.A court can dissolve a partnership when it is convinced that the partnership is unlikely to succeed.
• B)Yes.Under the UPA,if a partner can show the court the business suffered a loss the year before the case was filed,the court can dissolve the partnership.
• C)No.A court can only dissolve a partnership at the request of all the partners.
• D)No.A court does not have authority to dissolve the partnership.

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Definitions:

Variable Overhead Efficiency Variance

The difference between the actual hours taken to produce a good and the standard hours expected, multiplied by the variable overhead rate.

Excessive Inventories

A situation where a company holds more stock items than necessary, leading to increased storage costs and potential wastage.

Materials Price Variance

This measures the difference between the actual cost of materials used in production and the standard cost expected for those materials, indicating how efficiently an organization is purchasing materials.

Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, calculated as (Actual rate - Standard rate) x Actual hours.