Bhimani, Horngren,
Datar and Rajan,
Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
18
© Pearson Education Limited 2012
•
Manufacturing-sector companies provide tangible products that have been converted to a different form from the products purchased from suppliers. At the
end of an accounting period, stock of a manufacturer can include direct materials, work in progress and finished goods. Thus, manufacturing and merchandising companies have stock while service companies do not. Manufacturing companies
have direct materials, work in progress and finished goods stock, whereas merchandising companies have only goods purchased for resale stock (merchandise stock.
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