Selling and distribution overheads does not include
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Answer:
According to the terminology adopted by the Institute of Cost and Management Accountants, England, the selling overheads constitute “the cost incurred in promoting sales and retaining customers“ and the distribution overheads constitute “the cost of the process which begins with making the packed product available for ...
Explanation:
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Answer:
According to the terminology adopted by the Institute of Cost and Management Accountants, England, the selling overheads constitute “the cost incurred in promoting sales and retaining customers“ and the distribution overheads constitute “the cost of the process which begins with making the packed product available for despatch and ends with making the reconditioned returned empty packages available for re-use.“
Explanation:
Selling Overhead refers to all costs of seeking to create and stimulate demand or of securing orders e.g., sales office expenses, advertisement, salary of sales manager, traveling expenses, rent of show-room etc. Distribution overhead refers to all expenses incurred from the time the product is finished in the factory till its delivery to ultimate customers or consumers e.g., rent of warehouse, the lighting of the warehouse, running and maintenance of delivery vans, carriage on sales, packing charges etc. For the purpose of distribution, selling and distribution overheads are taken together.
The classification, codification and collection of selling and distribution overheads are done in a manner similar to one adopted for factory overhead. Selling and distribution overhead costs are classified according to their type, nature or purpose. Separate Cost Account Numbers are used for their codification.
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