Distinguish Between a Policy, a Rule, and a Standard Operating

question 48

Essay

Distinguish between a policy, a rule, and a standard operating procedure of an organization and give one example of each of these types of standing plans that would be used in a business.

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Definitions:

Finished Goods Inventory

The stock of completed products that are ready to be sold by a company.

Raw Materials Inventory

The stock of basic materials that are used in the manufacturing process and are awaiting to be processed.

Cost of Goods Sold

The immediate expenses associated with manufacturing the products a company sells, comprising both materials and labor.

Merchandise Inventories

Goods that a company intends to sell in the ordinary course of business, valued at the lower of cost or market.