Question

39. Which of the following is not included in the administration cost ?
(a) Salaries of general office staff
(b) Salaries of foremen
(c) Office supplies and expenses
(d) Postage, stationary, telephone, etc.
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Answer 1

Answer:

Salaries of foreman

Explanation:

Maybe Salaries of foreman is classified as factory overhead

Answer 2

The correct answer is OPTION B: Salaries of foremen.

• Wages and salaries for non-sales workers, as well as benefits, are included in administration costs.
• They are one of three categories of operating expenses that can be incurred by a business.
• The other two alternatives are selling and general expenses.
• Administration expenses are defined as indirect expenses on a company's income statement since they do not directly contribute to the manufacturing of a product or the delivery of a service.
• Because administration costs are largely constant independent of production level, they are categorized as fixed costs.