Categorise each of the following costs into one of these six categories: (i) Direct materials (ii) Direct
Question:
Categorise each of the following costs into one of these six categories:
(i) Direct materials
(ii) Direct labour
(iii) Indirect manufacturing costs
(iv) Administration expenses
(v) Selling and distribution expenses
(vi) Finance expenses
(a) Interest on bank overdraft
(b) Factory storekeepers’ wages
(c) Hire of Rolls-Royce for managing director’s use
(d) Repairs to factory roof
(e) Hotel bills incurred by sales staff
(f) Motor tax for vans used for delivering goods to customers
(g) Chief accountant’s salary
(h) Lubricants for factory machinery
(i) Cost of disks for firm’s computer
(j) Helicopter hire charges re special demonstration of company’s products
(k) Debt collection costs
(l) Costs of painting advertising signs on London buses
(m) Cost of airplane tickets for sales staff
(n) Wages of painters engaged in production
(o) Wages of timekeepers in factory
(p) Postal charges for letters
(q) Wages of office boy in general office
(r) Postal charges – parcels sent to customers
(s) Repairs to vans used for taking goods to customers
(t) Cost of raw materials included in product
(u) Wages for cleaners engaged in administration block
(v) Carriage inwards on raw materials
(w) Repairs to neon sign in Piccadilly Circus
(x) Advertising agency fees
(y) Wages of crane drivers in factory
(z) Power costs of accounting machinery.
Step by Step Answer:
Frank Woods Business Accounting Volume 2
ISBN: 9780273693109
10th Edition
Authors: Frank Wood, Alan Sangster