alleryStart learning →A business assembles and packages products for sale to merchandisers or end users. How is it classified?
AIt is a service business
BIt is a merchandising business
CIt is a manufacturing business
DIt is a wholesaling business
Answer & Solution
Correct answer: C. It is a manufacturing business
1. Operations are classified as service, merchandising or manufacturing depending on what the business has for sale.
2. A manufacturing business assembles and packages products for sale to merchandisers or end users.
3. A service business sells expertise, advice, skills or an experience rather than a physical product.
4. A merchandising business buys finished, packaged goods from other companies and resells them at a markup, which is not what assembling describes.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 1.1 Introduction_
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