Accounting

Type of Businesses

1) Trading or Merchandising - buying of goods and selling the same without change in form

a. Wholesaling - goods are sold in big quantities or in volume.

b. Retailing - when goods are sold in small quantities. It is the selling of goods and services directly to the final consumers or users.

Kinds of Retailer

1. Department Stores - carry a wide variety of product lines.

2. Supermarkets - sell a variety of food and houselhold products.

3. Specialty Stores - carry a variety of models for one kind or limited product lines.

4. Convenience Stores - carry high turnover goods, twenty-four hours a day and seven days a week.

5. Superstores - larger than supermarkets and department stores have emerged.

6. Factory Outlets - different manufacturers are grouped together in one factory outlet mall. Usually located in places far from cities.

7. Direct Selling - is one-on-one selling.

2) Manufacturing - the process of converting raw materials into finished products.

A. Labor Intensive - processing is done manually by the workers.

B. Capital Intensive - processing is done through the use of machinery.

*Manufacturing Cost or Production Cost - is the sum of the costs of direct materials, direct labor and factory overhead.

Elements of Manufactuting Costs

1. Direct Materials - pertain to all materials that form parts of the finished product.

2. Direct Labor - is labor used in manufacturing a product which can be charged directly to the particular product.

3. Factory Overhead - refers to indirect elements of cost incurred to produce a finished product.

3) Service - is doing work for others.

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Credits to Solita Frias! This is an easy topic, right? See you on the next lesson! Happy learning!!