Which one of these statements is correct?
A)Finished goods are classified as a commodity.
B)Work-in-progress may have less resell value than the individual component parts did.
C)Raw materials that are considered to be a commodity are generally illiquid.
D)Raw materials consist of only those goods that are found in nature.
E)Finished goods are highly liquid because they are completed.

Question

Quizplus · Accepted Answer

Work-in-progress may have less resell value than the individual component parts did because it is still in the process of being transformed into a finished product. Once the product is completed, it may have a higher value as a finished good. The other statements are incorrect. Finished goods are not always classified as a commodity (they can be differentiated products), raw materials that are considered to be a commodity are generally highly liquid, raw materials can include goods that are not found in nature (e.g. synthetic materials), and finished goods may not necessarily be highly liquid depending on market demand and other factors.

Which One of These Statements Is Correct