Multiple Choice
Job order costing would be used for all of the following except:
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4. Merchandising Operations
Service Company vs. Merchandising Company
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Each of the following are examples of a merchandising company except:
A
A law firm
B
A grocery store
C
An electronics store
D
A clothing retailer
Verified step by step guidance1
Understand the concept of a merchandising company: A merchandising company is a business that purchases goods and resells them to customers. These companies typically maintain inventory and focus on selling physical products.
Review the examples provided in the question: A grocery store, an electronics store, and a clothing retailer are all businesses that sell physical goods to customers, which aligns with the definition of a merchandising company.
Analyze the exception: A law firm provides professional services rather than selling physical goods. Service-based businesses do not maintain inventory and are not classified as merchandising companies.
Compare the characteristics of a law firm to those of merchandising companies: A law firm generates revenue through expertise and legal services, which is fundamentally different from the operations of a merchandising company.
Conclude that the correct answer is the law firm, as it does not meet the criteria of a merchandising company, unlike the other examples provided.
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