Determine Whether Integration Between the Following Types of Firms Would

question 13

Essay

Determine whether integration between the following types of firms would constitute a horizontal,vertical,or conglomerate merger.
a.A food company and a drug company.
b.A milk producer and a cheese producer.
c.A computer chip manufacturer and a silicon producer.

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Definitions:

Average Cost

A method of inventory valuation which calculates the cost of goods sold and ending inventory based on the average cost of all similar items.

Journal Entries

These are records of all the financial transactions of a business, recorded in the chronological order in which they occur.

Units Sold

The total quantity of products or goods a company has sold during a particular period.

Adjusting Entries

Journal entries made before the preparation of financial statements to ensure that revenues and expenses are recognized in the period they occur.