In A(n)________ Contract,one Party Consents to Sell to a Second

question 44

Multiple Choice

In a(n) ________ contract,one party consents to sell to a second party all of the goods that party makes in a given period of time.

• A)requirements
• B)current market price
• C)cost-plus
• D)output

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Definitions:

Direct Material B

Specified materials that are directly traceable to the manufacturing of a product and constitute a significant portion of production cost.

Finished Goods Inventory

Manufactured products that are complete and ready for sale, recorded as an asset on the balance sheet until sold.

Raw Materials Inventory

The total cost of all the components and materials held by a company that are eventually used in the production process.

Gross Margin

The difference between the revenue earned from sales and the cost of goods sold, indicating the profitability from the core business activities before administrative and other expenses.