Asked by Boston Bragg on May 05, 2024
Verified
Finished goods inventory for a manufacturing company is equivalent to inventory for a merchandising company.
Finished Goods Inventory
The stock of completed products available for sale at the end of an accounting period.
Manufacturing Company
A business entity that engages in the production of goods using labor, machines, tools, and chemical or biological processing.
Merchandising Company
A type of company that purchases goods at wholesale prices and resells them at retail prices, making a profit from the markup.
- Understand the significance of direct materials in determining manufacturing costs and assessing inventory value.
Verified Answer
JV
Jesus VasquezMay 10, 2024
Final Answer :
True
Explanation :
Finished goods inventory for a manufacturing company refers to the completed products that are ready to be sold, while inventory for a merchandising company refers to the products being purchased and resold. Both types of inventory refer to the physical goods that a company has on hand to be sold.
Learning Objectives
- Understand the significance of direct materials in determining manufacturing costs and assessing inventory value.