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Why Are So Many Businesses Structured as Sole Proprietorships When

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Why are so many businesses structured as sole proprietorships when the corporate form of business offers more advantages?


Definitions:

Direct Labor Cost

The total cost of work performed by employees directly involved in the manufacturing process.

Process Costing System

An accounting method used for mass production of similar products, allocating production costs to products based on the process they go through.

Work In Process Inventory

Goods partially manufactured but not yet completed, representing an interim step in the production process.

Process Cost System

An accounting system used to track and assign production costs to units of output, particularly useful for homogeneous products.

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