Multiple Choice
Landen Corporation uses a job order costing system. Which type of company is most likely to use this system?
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4. Merchandising Operations
Service Company vs. Merchandising Company
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Which type of company is Cane Company if it manufactures two products and sells them to customers?
A
Merchandising company
B
Service company
C
Nonprofit organization
D
Manufacturing company
Verified step by step guidance1
Understand the different types of companies: A merchandising company buys and sells finished goods, a service company provides intangible services, a nonprofit organization operates for purposes other than profit, and a manufacturing company produces goods from raw materials.
Identify the key characteristics of a manufacturing company: It transforms raw materials into finished goods through production processes and sells these goods to customers.
Analyze the information provided: Cane Company manufactures two products, which means it engages in production activities to create goods from raw materials.
Compare the characteristics of Cane Company with the definitions of the company types: Since Cane Company manufactures products, it aligns with the definition of a manufacturing company.
Conclude that Cane Company is a manufacturing company based on its activities of producing goods and selling them to customers.
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