The Basic Distinction Between a Company's Sales Branches and Its

question 7

Multiple Choice

The basic distinction between a company's sales branches and its sales offices is that:

• A)sales branches carry inventory whereas sales offices do not.
• B)sales branches are manufacturer-owned, whereas sales offices are not.
• C)sales branches are always national, whereas sales offices are always local.
• D)sales branches are used only for services, whereas sales offices are used only for physical goods.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the production process, including salaries of supervisors, maintenance, and utilities in the manufacturing facilities.

Product Costs

Costs that are directly associated with the creation of a product, including direct materials, direct labor, and manufacturing overhead.

Direct Materials

Raw materials that are directly traceable and integral to the finished product in the manufacturing process.

Selling Costs

All costs that are incurred to secure customer orders and get the finished product or service into the hands of the customer.