A Sole Proprietorship Is the Simplest Form of Business Organization

question 89

True/False

A sole proprietorship is the simplest form of business organization.

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Definitions:

Standard Quantity

The predetermined or budgeted amount of materials expected to be used in the production of a product, based on efficiency and productivity standards.

Variable Overhead Efficiency Variance

The difference between the actual hours taken to produce a good and the standard hours expected, multiplied by the variable overhead rate.

Excessive Inventories

A situation where a company holds more stock items than necessary, leading to increased storage costs and potential wastage.

Materials Price Variance

This measures the difference between the actual cost of materials used in production and the standard cost expected for those materials, indicating how efficiently an organization is purchasing materials.