Which of the Following Statements Best Summarizes the Experience of American

question 7

Multiple Choice

Which of the following statements best summarizes the experience of American franchisors in foreign countries?

• A) Very few American franchisors of any size have had success in international markets.
• B) Large franchisors have had success in other nations, but newer and smaller franchisors have lacked the financial strength and reputation to succeed in global markets.
• C) The only nations in which American franchisors have achieved any success are Great Britain and Mexico.
• D) Both large and small franchises have found success in foreign countries by providing convenience and a predictable level of service and quality.

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Definitions:

Variable Costing

A financial recording approach that incorporates only variable manufacturing expenses, such as raw materials, direct workforce, and fluctuating production overheads, into the costs of goods produced.

Net Operating Income

A financial term representing the profit made from a company’s operations, after subtracting operating expenses from operating income.

Absorption Costing

The product cost determination method under this accounting strategy includes the expenses for direct materials, direct labor, and all manufacturing overhead, whether it is variable or fixed.

Gross Margin

A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage.