A Disadvantage of a Sole Proprietorship Is That

question 33

Multiple Choice

A disadvantage of a sole proprietorship is that:

• A) there is flexibility in decision making.
• B) profits are taxed twic.
• C) profits are taxed at a personal income level.
• D) financing is limited to the owner's ability to borrow.

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Definitions:

Labor Rate Variance

The variance between the real labor cost and the anticipated (or norm) cost, calculated based on the working hours.

Materials Quantity Variance

A calculation of the difference between actual material usage and expected usage in production, multiplied by the standard cost for each unit.

Materials Price Variance

The difference between the actual cost of materials and the expected cost based on standard prices.

Raw Materials

Basic substances or components that are used in the initial stages of the manufacturing process to produce goods.