Answer:
Correct Answer:
D) The disability must occur before a stated age, such as 65, for premiums to be waived.
Explanation:
In Life insurance, the individual insured against bad events that may likely occur in his or her life through an insurance company. This would led to the company to pay his beneficiary or the individual in question if such event happened.
<em>For waiver-of premium to occur in a life insurance,the disability of the individual must occur before the age of 65 years which is assumed to be the retirement age.</em>
7 Common Costs Associated with Operating a franchise
Exactly how much a franchise costs is different for every franchise company out there, but most of them have similar startup costs. While the franchisor will help you with some of these costs — maybe through deals it has with preferred vendors or by lending you the money — the onus will be on you to come up with the funds on your own. And it’s not just funds to build and open your franchise, you will also need funds to run it until it becomes profitable.
Let’s take a look at some of the most common costs associated with opening a franchise.
Franchise Fee
When opening a franchise, it’s important to remember that you are essentially “renting” the brand from the franchise. That brand comes with a lot of support and recognition, but you still have to pay for the privilege of being associated with it.
Franchise fees can be as little as $20,000 or as much as $50,000 or even more. The amount of the fee usually depends on how much you have to do to get the franchise up and running. Franchises that require you to build a location will be more than a mobile or home-based franchise, for example.
Your fee will usually cover the cost of your training and site selection support, hence why the fee is higher for businesses that require a location. Exactly what the fee covers is different for each franchise. Sometimes it will just act as a licensing fee for the rights to use the brand. When you are doing your initial research, be sure to find out exactly what your franchise fee covers.
Legal and Accounting Fees
These fees are on you, of course, but they are well worth it. Any person who is considering purchasing a franchise should absolutely consult with an attorney who is familiar with franchise law. The attorney you hire can review the franchise disclosure document with you and go through the franchise agreement to make sure it’s fair.
Each attorney will charge differently for this and it will largely depend on how much time your attorney has to spend on the documents, but you’ll probably have to budget between $1,500 and $5,000 for this.
It’s also a good idea to start working with a qualified accounting firm as soon as you decide to purchase a franchise. An accountant can help you set up your books and records for the company and can also help you determine how much working capital you’ll require to get your business set up and have it run until it becomes profitable.
Working Capital
Speaking of working capital, this is the amount of cash that is available to a given business on a day-to-day basis. It’s crucial to have enough working capital to cover a given length of time. This could be just a few months, or it could be a few years. It depends on how much time the business will need to start bringing in enough revenue for it to run.
Franchisors do generally provide an estimate of how much working capital you’ll require, but you should back this up with your own research and do your own calculations with the help of your accountant. Talk to other franchisees in the system about how much they needed.
Build-Out Costs
Build-out costs include constructing the building and purchasing all the furniture, fixtures, equipment, signage and anything else related to the building such as architectural drawings, zoning compliance fees, contractor fees, decor, security, deposits, insurance and landscaping. Your franchisor will give you an estimate of build-out costs, which vary widely between franchises.
If you choose a home-based franchise, obviously there will not be any buildout costs associated with it, but there may be other expenses like vehicles.
Supplies
These are all the things you require to run your franchise. Restaurants will need food, of course, but they also need plates, cutlery and napkins. Other franchises will need different things to offer their services. Your franchisor can give you a list or estimate of what you will need to run your franchise.
Inventory
If you are purchasing a retail franchise or some other kind of franchise that sells products, you will need inventory. This is another cost that will vary widely between franchises, but your franchisor should be able to help you with estimates. You might have to purchase between $20,000 and $150,000 worth of inventory depending on the business.
Travel and Living Expenses During Training
Franchisors will provide training for franchisees and often the franchisee’s management team. While the training itself is usually covered by the franchise fee, the travelling and living expenses to go to a franchise’s headquarters for that training may not be covered. Often, training runs from a few days to a week or so and is followed up with more training back at the franchisee’s location.
You’ll want to determine whether travel and accommodation are covered by your franchisor and, if not, work out how much the training related expenses will cost you.
Answer:
Rally must sell 1,080 units of Standard and 720 units of Deluxe
Explanation:
Standard Deluxe Total
Sales price per unit $45 $65
Less: Variable cost ($35) ($45)
Contribution Margin per unit $10 $20
Sales Mix units (A) $3 $2 $5
Contribution margin $30 $40 $70
Weighted average Contribution $14
per unit C= B/A
Appointment of fixed cost between standard and deluxe
Total Fixed cost = 14,700
Break even point = Fixed cost / Weighted average Contribution per unit
= 14,700 / 14
= 1,050
Apportionment of Break even point sales between Standard and deluxe in sales mix ratio (3:2)
Standard = 1,050 * 3/5 = 630
Deluxe = 1,050 * 2/3 = 420
Unit to be sold to get desired profit = Fixed cost + Desired profit / Weighted average Contribution per unit
= (14,700 + 10,500) / 14
= 1,800
Apportionment of Units to be sold to get desired profit between Standard and Deluxe in sales mix ratio (3:2)
Standard = 1,800 * 3/5 = 1,080
Deluxe = 1,800 * 2/5 = 720
To reach target operating income, Rally must sell 1,080 units of Standard and 720 units of Deluxe
Answer:
$237,630
Explanation:
Windsor report as its December 31 inventory:
= Inventory in hand as per physical count + Goods purchased from P corporation under FOB shipping basis + Cost of goods sold to A company under FOB destination basis
= $191,500 + $24,510 + $21,620
= $237,630
Therefore, the amount to be reported by Windsor company is $237,630.
Answer:
a if revenue is greater the loss in money will deplinish
