Which of the Following Transactions Is Considered a Purchase of Final

question 196

Essay

Which of the following transactions is considered a purchase of final output? Which one is considered the purchase of an intermediate good?
(a)Albert purchased a camera from the U.S.to use on his vacation in the Bahamas.
(b)Albert purchased a roll of film to use in his camera.
(c)An owner of a bakery purchased wheat to make bread.
(d)A chocolate factory purchased milk to make chocolate.
(e)The Ford Company purchased 10 tons of steel to make cars.
(f)Sue purchased cleaning detergent to use in her newly purchased washing machine.
(g)Karen bought tomato seeds and planted them in her backyard for her own use.

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Definitions:

LIFO Inventory Method

"Last In, First Out," an inventory costing method where the last items purchased are the first ones sold, affecting the cost of goods sold and ending inventory value.

Cost Of Goods Sold

The direct costs tied to the production of products sold by a company, including materials and labor.

Merchandise Inventory

Merchandise Inventory includes goods that are purchased and held for resale by a retail or wholesale business, representing one of the primary sources of revenue.

FIFO

An inventory valuation method where the first items purchased or produced are the first ones sold, impacting the cost of goods sold and inventory valuation.