Which of the Following Industries Is Likely to Have the Highest

question 67

Multiple Choice

Which of the following industries is likely to have the highest cost of goods sold percentage relative to sales?

• A)Drug manufacturers
• B)Computer manufacturers
• C)Retail organisations
• D)The percentage will usually depend on the success of a particular company

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Definitions:

Accrued Liabilities

Accrued liabilities are financial obligations that a company has incurred but has not yet paid or recorded in its financial statements.

Direct Method

A cost allocation method that assigns service department costs directly to producing departments without any intermediate allocations.

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is received or paid.

Operating Activities

Business activities that relate directly to the production, sale, and delivery of a company's products or services, generating revenue.