COST ACCOUNTING
COST MANAGEMENT SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The cost of Items that the contract manufacturer had to purchase to perform the contract manufacturing service, and the cost of resources used by the contract manufacturer
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The cost of items that the original equipment manufacturer (OEM) owns and has provided to the contract manufacturer for use in the process of making the output Items
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The cost of resources consumed at the OEM’s factory
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The cost of the contract manufacturing service Item. This is the price that the contract Manufacturer will charge to make the outputs and would normally be enough to cover their costs and include a fair profit.
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Detailed explanation-1: -Examples include commuter rail lines, rubber products, textiles, heavy machinery, and plastic injection molding. Industrial contract manufacturers can also produce some industrial electronic items.
Detailed explanation-2: -Contract Manufacturing Services means all operations (including but not limited to testing and release, receiving, regulatory and compliance, making, picking, packaging, quality control, testing, storage, documentation, and/or shipment) required to produce and distribute the Commercial Product.
Detailed explanation-3: -The main difference is that contract manufacturers are hired by other companies to produce items on their behalf. Manufacturers can either produce finished products intended for the end user/customer, or they can make components that are used to manufacture other products.
Detailed explanation-4: -Contract manufacturing is the production of goods by a third party (the contract manufacturer) for a company that cannot produce its own goods in-house. Ultimately, contract manufacturing is a form of outsourcing that helps businesses manufacture their products and goods.