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Explain the basis of classifying goods into intermediate and final goods. Give suitable examples.

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Intermediate Goods Final Goods
(i) These goods to be used as raw material for the production of other goods during the accounting year There goods not to be used as raw material for the production of other goods during the accounting year
(ii) These goods to be used for resale by the firms to make profits during the accounting year These goods not to be used Ior resale by the firms to make profits during the accounting year.
(iii)Value is yet to be added to these goods. Value is not to be added to these goods
Eg. - Raw material Eg. - Machine purchased for ihe
installation in the factory.

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FINAL GOODS INTERMEDIATE GOODS 
Final goods: Are those goods, which are used either for final consumption or for investment. It includes final consumer goods and final production goods.  Intermediate goods are those goods, which are used either for resale or for further production. 
The goods are not used to satisfy their needs by consumers or invested by producers.
E.g. bread &milk purchased/used by consumers Purchase of machinery by producer		 The nondurable goods used as raw materials during an accounting year or capital goods bought for resale.
E.g. bread purchased for making bread pakoras at a restaurant 
Resale of goods by firm for profit making in an accounting year is not possible.  Resale of goods by firm for profit making is possible in an accounting year. 
Final goods are included in estimation of national income Intermediate goods are not included in the estimation of national income.
Value addition not required in future.  Value addition required in future.

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