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When the Cost of Shipping Raw Materials Is Higher Than

question 85

True/False

When the cost of shipping raw materials is higher than the cost of of shipping the final product,firms tend to locate near the raw materials.


Definitions:

Supplies

Materials and items used in the day-to-day operations of a business, which may be considered either current assets or expenses.

Contra-Asset

An account that is used to reduce the balance of a related asset account, with the most common example being accumulated depreciation.

Contra-Revenue

An account deducted from gross revenue or sales, which includes returns, allowances, and discounts, ultimately affecting the net revenue reported.

Purchases Discount

A reduction in the price of goods a company buys, typically for paying early or within a specified time period.

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