Annual Profits Serve as the Best Tool to Assess Franchisee

question 12

True/False

Annual profits serve as the best tool to assess franchisee performance because profits can be readily observed and verified,unlike sales,which are difficult to measure.

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Definitions:

Expected Activity

The anticipated level of operations based on projections, such as hours worked, units produced, or services rendered.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their usage of the activities.

Manufacturing Overhead

All manufacturing costs other than direct materials and direct labor, including costs related to running a factory such as utilities, depreciation, and maintenance.

Direct Labour-Hours

The total hours worked directly on the production of goods or services.