Unique versus Fungible Products — Practice Problems

By Kenneth Boyd, Kate Mooney

Companies record their cost of goods sold in different ways, depending on whether the goods they sell are unique or fungible (that’s business-speak for ‘indistinguishable from each other’).

So how do you tell a unique good from a fungible good? Don’t worry: you can sharpen your skills of discernment with the following practice questions.

Practice questions

  1. Which of the following is a fungible good?

    A. Corn

    B. Original oil paintings

    C. Designer jewelry pieces

    D. New cars

    E. Native American hand-woven tapestries

  2. Name three fungible goods.

    A. 400 gallons of water to be sold to different customers, 400 gallons of special mix paint to be sold to one customer, 400 gallons of sweet crude oil

    B. 2,000 bushels of corn, 2,000 bushels of tomatoes, 2,000 bushels of soybeans

    C. A painting by Norman Rockwell, a painting by Grandma Moses, a painting by Claude Monet

    D. A new convertible, a new truck, a new minivan

    E. A diamond ring, an emerald ring, a sapphire ring

Answers and explanations

  1. The correct answer choice is A.

    Fungible goods are indistinguishable from one another. Kernels of corn are identical. Artwork, such as original oil paintings, hand-woven tapestries, or designer jewelry, is unique and therefore not fungible. New cars are also unique and are identified by an identification number.

  2. The correct answer choice is B.

    Corn, tomatoes, and soybeans are all fungible goods. Each item is not uniquely identifiable.

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