Which item is normally classified as a selling and distribution overhead?
Correct answer: A. Commission paid to sales representatives
- A. Commission paid to sales representatives
- B. Depreciation of factory machinery
- C. Wages of production-line workers
- D. Power used by manufacturing equipment
Explanation
Sales commission is incurred to obtain and distribute sales, so it is a selling and distribution overhead. Factory machinery depreciation, production wages and manufacturing power are production-related costs.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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