Once a Company Decides to Use Indirect Rather Than Direct

question 47

Essay

Once a company decides to use indirect rather than direct distribution,it must choose one of the three strategies of distribution.Discuss what each choice means in terms of product availability to final consumers.

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Definitions:

Raw Materials

Basic materials that are used in the production process to manufacture finished goods.

Finished Goods

Finished goods awaiting sale and not yet delivered to end-users.

Work in Process Inventory

Represents the total cost of unfinished goods currently being manufactured.

Manufacturing Costs Assigned

Direct and indirect expenses attributed to the production of goods.