To Get External Financing, an Entrepreneur's Business Plan Must Pass

question 66

True/False

To get external financing, an entrepreneur's business plan must pass the reality test, the competitive test, and the value test with potential lenders and investors.

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Definitions:

Labour Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain number of units, valued at the standard labor rate.

Direct Labour Cost

The wages and salaries paid to workers who are directly involved in the production of goods or services.

Direct Material Costs

The costs of raw materials that can be directly traced to the production of a specific product.

Direct Material Quantity Variance

The difference between the actual amount of direct materials used and the standard amount expected to be used, multiplied by the standard cost per unit of material.