Multiple Choice
Which of the following best describes Dorsey Company if it manufactures three products?
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5. Inventory
Merchandising Company vs. Manufacturing Company
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Which type of company purchases raw materials and manufactures goods to sell?
A
Manufacturing company
B
Merchandising company
C
Retail company
D
Service company
Verified step by step guidance1
Understand the types of companies listed in the problem: Manufacturing company, Merchandising company, Retail company, and Service company.
Define a Manufacturing company: This type of company purchases raw materials and transforms them into finished goods through a production process. These goods are then sold to customers.
Define a Merchandising company: This type of company buys finished goods from suppliers and sells them to customers without altering the goods.
Define a Retail company: A subset of merchandising companies, retail companies sell goods directly to consumers, typically in smaller quantities.
Define a Service company: This type of company provides intangible services rather than physical goods to customers.
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