Final answer:
Manufacturing companies have work in process inventory because they are involved in transforming raw materials into finished products. In contrast, merchandising companies sell products as is, and service companies do not deal with physical inventory.
Step-by-step explanation:
Work in process inventory refers to partially finished goods that are currently being produced on the factory floor of a company and have not yet reached the final stages of production where they can be sold as finished goods. This type of inventory is relevant for businesses that actually produce physical goods.
Out of the options given, manufacturing companies would have work in process inventory as they are engaged in the conversion of raw materials into finished products. Merchandising companies typically buy the finished product to resell as is, whereas service companies typically do not have any physical goods that would be classified as work in process inventory.