Determine Whether Each of the Following Outputs Is Considered an Intermediate

question 70

Short Answer

Determine whether each of the following outputs is considered an intermediate good,a final good,or neither for purposes of calculating GDP in the current year.
a.New tires put on a new Corvette at Big O Tire store
b.The net sales price of a home built in 1990 when it is resold in 1997
c.The commission earned by a stock broker on the sale of stock
d.The net price that is paid for 1000 shares of stock in Dell

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Definitions:

Conversion Activity

Processes that transform raw materials into finished products, including manufacturing, assembling, and packaging operations.

Weighted Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all units available for sale.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the costs required to convert raw materials into finished goods.

Cost Of Goods Sold

The cost of goods sold (COGS) refers to the direct costs attributable to the production of the goods sold by a company, including material and labor costs.