Question

For inventory manufactured by the seller, sourcing of the gain on the sale of inventory is based on _________ ____________ of the assets used in the manufacturing process.

a. Physical location
b. Residence
c. Ownership
d. Functional use

Answer 1

The sourcing of the gain on the sale of inventory manufactured by the seller is based on the physical location of the assets used in manufacturing. This encompasses how the physical aspects of a product and the firm's location can influence business success.

Step-by-step explanation:

For inventory manufactured by the seller, the sourcing of the gain on the sale of inventory is based on the physical location of the assets used in the manufacturing process. The physical aspects of a product and the locality of firms play a significant role in influencing the business environment. Factors such as being located at a heavily traveled intersection or being close to an automobile manufacturer can be advantageous for businesses. This concept aligns with economic theories, like those presented by 19th-century German economist Johann von Thünen, which suggest that location influences land use and economic activities with respect to the market for a product.