John assembles computers for the Computer Systems to Go Company. His company purchases Pentium MMX™ chips from Intel. When John is installing the chip it is inventory, but for Intel it is inventory.
A) work in process; finished goods
B) finished goods; raw material
C) raw material; finished goods
D) raw material; work in process

Question

Quizplus · Accepted Answer

For John's company, the Pentium MMX™ chips are considered work in process as they are components being assembled into the final product. For Intel, these chips are finished goods, as they are the final product Intel produces and sells.

John Assembles Computers for the Computer Systems to Go Company