Which of the Following Statements About a Franchise Is Most

question 72

Multiple Choice

Which of the following statements about a franchise is most true?

• A) One advantage is that the franchisor enjoys the benefits of being the sole proprietor
• B) The failure rate of franchises is lower than for sole proprietorships
• C) Franchising has low start up costs
• D) Franchisors share the profits

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Definitions:

Direct Materials Cost

The cost of raw materials and components that go directly into the production of a product.

Work In Process Inventory

The value of all the materials, labor, and overhead costs for products that are partially completed by a company.

Equivalent Unit

A measure used in cost accounting to express the amount of work done on units of production during a period, considering partially completed units.

Conversion Costs

The cost required to convert raw materials into finished products, typically including labor and overhead expenses.