Refer to the Scenario Below to Answer the Following Questions

question 7

Multiple Choice

Refer to the scenario below to answer the following questions.
Growing a Web-Development Company (Scenario)
Vincent and Alice are partners in a one-year-old web development business called Spy-der Web Execution. Vincent comes from a graphic design background and specializes in the look and feel of web projects. Alice comes from the computer gaming industry and is a highly experienced programmer and web developer-with a particular leaning toward Wordpress as a website backbone.
So far they have brought in less business than they had anticipated-about 25 percent less. As a result, they are operating at just a little below break even, and it is costing them about $500 a month to cover expenses (including rent on a small office space where they meet clients) . The situation is disappointing and was not anticipated by either Vincent or Alice.
As with many businesses like this that are easy to get into with little investment, they did not do a full feasibility study or business plan. They are unsure about how to divide up their responsibilities (who is responsible for what) , and therefore neither person is proactively going after new business, managing each project's budget, and determining even if they are making money on the work.
You are now in the role of advising the partners about a number of issues.
-Although a seemingly backwards step, doing a thorough evaluation of their business idea might be a wise exercise because Vincent and Alice could discover answers to all of the following questions EXCEPT ____________________.

• A) Do you have the capabilities to do what you have chosen?
• B) Are you ready to work hard?
• C) Do you have a realistic picture of the venture's potential?
• D) Are you ready to be an entrepreneur?
• E) Do you ever plan on having the time for a personal life in the near future?

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Definitions:

Overapplied

A term used when the estimated costs, such as overhead, allocated to a product or project exceed the actual costs incurred.

Manufacturing Overhead Applied

The allocation of manufacturing overhead costs to individual units of product based on a predetermined rate or method.

Work in Process Inventory

Work in Process Inventory consists of materials and products that are in the process of being manufactured but are not yet complete.

Work in Process

The portion of inventory that is in the production process but has not yet been completed.