Q-21-15
Question
How do service companies differ from manufacturing companies?
Step-by-Step Solution
Verified Answer
Answer
Service companies do not produce any product.
1Step 1: Definition of Service Company
Companies that provide services to earn revenue are known as services companies that do not produce any product or goods.
2Step 2: How do service companies differ from manufacturing companies
Service companies do not have any inventory and cost of goods sold while manufacturing companies have an inventory of raw material and fixed goods as they are involved in the manufacturing of goods whereas service companies provide only services.
Other exercises in this chapter
Q11SE
Analyzing profitability Refer to Short Exercise S21-10. Which business segment provided the greatest total contribution margin? Which business segment had
View solution Q12SE
Analyzing profitability analysis, service company Burlington Internet Services is an Internet service provider for commercial and residential customers. T
View solution Q-21-9-RQ
When should a company use absorption costing when setting sales prices? When should it use variable costing?
View solution Q13SE
Using absorption and variable costing Meyer Company reports the following information for March:Net Sales Revenue $ 45,300 Variable Cost of Goods Sold
View solution