Question

In contemporary global companies, where does the majority of the cost of goods sold originate from?

A) Internal operations
B) Customers
C) Suppliers outside the organization
D) Government taxes

Answer 1

Final Answer:

In contemporary global companies, the majority of the cost of goods sold originates from:

C) Suppliers outside the organization.

Step-by-step explanation:

In the context of contemporary global companies, the cost of goods sold (COGS) is heavily influenced by the expenses associated with acquiring raw materials and components from external suppliers. Option C, "Suppliers outside the organization," accurately reflects this reality.

Globalization has led many companies to source materials and components from suppliers around the world to optimize costs and take advantage of specialized capabilities. As a result, the expenses related to the procurement of goods from external suppliers significantly contribute to the overall cost of goods sold.

While internal operations (Option A) and customer-related factors (Option B) can influence costs, the direct expenses associated with raw materials and components acquired from suppliers (Option C) play a central role in determining the cost of goods sold for contemporary global companies.