Within the costing system of a manufacturing company the following types of expenses were incurred: Cost of oils used to lubricate production machinery Motor vehicle licenses for lorries Depreciation of factory plant and equipment Cost of chemicals used in the laboratory Commission paid to sales representatives Salary of the secretary to the finance director Trade discount given to customers Holiday pay of machine operatives Fees to advertising agency Rent of finished goods warehouse Salary of scientist in laboratory Insurance of the company’s premises Salary of supervisor working in the factory Protective clothing for machine operatives  Required: As the Cost Accountant, you have been asked to classify the items into the following categories: Production Costs Selling Costs Distribution Costs Administrative Costs Research and Development Costs

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Spring 2021 : Cost Accounting - ACT208

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Discussion Question 1

by Najay Murray - Thursday, 21 January 2021, 12:12 AM
Number of replies: 9
 

 

Within the costing system of a manufacturing company the following types of expenses were incurred:

  1. Cost of oils used to lubricate production machinery
  2. Motor vehicle licenses for lorries
  3. Depreciation of factory plant and equipment
  4. Cost of chemicals used in the laboratory
  5. Commission paid to sales representatives
  6. Salary of the secretary to the finance director
  7. Trade discount given to customers
  8. Holiday pay of machine operatives
  9. Fees to advertising agency
  10. Rent of finished goods warehouse
  11. Salary of scientist in laboratory
  12. Insurance of the company’s premises
  13. Salary of supervisor working in the factory
  14. Protective clothing for machine operatives

 Required:

As the Cost Accountant, you have been asked to classify the items into the following categories:

  1. Production Costs
  2. Selling Costs
  3. Distribution Costs
  4. Administrative Costs
  5. Research and Development Costs
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