A Product's Form Utility Is Created When Value Is Added

question 18

Multiple Choice

A product's form utility is created when value is added to the product through a manufacturing,production or assembly process.However,logistics activity can provide form utility also.Which is an example of the creation of form utility by a logistics activity?

• A) when lumber is cut and made into a chair
• B) when a firm's finance manager approves customer purchases on a credit basis
• C) when bulk computer disks in different colors are packed in three-color assortments for sale to computer users
• D) the breaking bulk and repackaging at a distribution center

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Definitions:

Net Assets

Net Assets represent the residual interest in the assets of an entity after deducting its liabilities, essentially equivalent to equity in a for-profit organization.

Net Income

The total earnings or profit of a company after subtracting all expenses, including taxes, interest, and costs, representing the bottom line on an income statement.

Comparative Consolidated Financial Statements

Financial statements that provide financial information for multiple periods, offering a way to compare a company's financial performance over time.

Acquisition Differential

The difference between the cost of acquiring a company and the fair value of its identifiable net assets, often recognized as goodwill.