Multiple Choice
Which type of costing system would a service company most likely use compared to a merchandising company?
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4. Merchandising Operations
Service Company vs. Merchandising Company
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1. What is the term for a merchandising business that sells goods directly to those who use or consume them?
A
Manufacturer
B
Service Provider
C
Retailer
D
Wholesaler
Verified step by step guidance1
Understand the key terms: A 'merchandising business' refers to a company that buys goods and resells them for profit. The question asks for the term describing a business that sells goods directly to consumers.
Define the options provided: A 'Manufacturer' produces goods, a 'Service Provider' offers services rather than goods, a 'Wholesaler' sells goods in bulk to other businesses, and a 'Retailer' sells goods directly to end consumers.
Focus on the term 'directly to those who use or consume them': This phrase indicates that the business interacts directly with the final customer, which aligns with the definition of a 'Retailer.'
Eliminate incorrect options: Manufacturers and wholesalers do not sell directly to consumers, and service providers do not sell physical goods. This leaves 'Retailer' as the correct term.
Conclude that the term for a merchandising business selling goods directly to consumers is 'Retailer,' based on the definitions and elimination process.
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