Which of the Following Is a Franchisor Problem

question 29

Multiple Choice

Which of the following is a franchisor problem?

• A)Attempts to require franchisees to buy products exclusively from the franchisor may violate the Sherman Act.
• B)Attempts to require adherence to prices set by the franchisor may violate the Sherman Act.
• C)Cannot use insurance to cover risks due to torts committed by the franchisee.
• D)The franchisee has to be made an employee of the franchisor.

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Definitions:

Step-down Method

A cost allocation method used in accounting to distribute overhead costs to various cost objects based on a hierarchical sequence of allocation bases.

Custodial Services

These are services related to the maintenance and cleaning of buildings and facilities.

Square Feet

A unit of area measurement equal to a square measuring one foot on each side.

Step-down Method

An approach in accounting used to allocate indirect costs to relevant cost objects by sequentially distributing service departments' costs to production departments and other service departments.