Question

Explain with the example the basis of classifying goods into final goods and intermediate

Answer 1

Answer:

The underlying basis for classifying goods into final goods and intermediate goods is based on the fact whether the good has been purchased for 'ultimate consumption' or 'further processing'. If a goods has been purchased for ultimate consumption, say milk then it is regarded as a final good. While. if a good is purchased for 'further processing', say milk has been purchased for making curd by the firm, then it will be regarded as an intermediate good.

Answer 2

Explanation:

goods which are purchased by the production unit from other production unit and means for resale or for using up completely during the same here are called intermediate goods for raw material

goods which are purchased for consumption and investment Accord final goods

for example

purchase of machinery for installation in factory