(i) Travelling expenses have been assumed to have been related to salesmen. (ii) Discount allowed is presumed to be as cash discount which is a financial item. PROBLEM 1.8 A company manufactures and retails clothing. You are required to group the costs which are listed below and numbered 1 to 20 into the following classification (Each cost is intended to belong to only one classification): (a) Direct Materials (e) Office and Administration Costs (b) Direct Labour (1) Selling and Distribution Costs (c) Direct Expenses (g) Finance Cost (d) Production Overheads (h) Research and Development Costs 1 Telephone rental plus metered calls 2. Wages of security guards for factory 3. Parcels sent to customers. 4 Wages of operators in cutting department 5. Developing a new product in the laboratory 6. Wages of forklift truck drivers who handle raw materials. 7. Wages of storekeepers in materials store 8. Chief accountant's salary, 9. Cost of painting advertising slogans on delivery vans, 10 Auditor's fee. 11 Cost of advertising on television 12. Lubricants for sewing machines 13. loppy disks for office computer 14 Maintenance contract for office photo-copying machine. 924 15 Interest on bank overdraft 16 Market research undertaken prior to new product launch 17. Carriage on purchase of raw materials. 18. Royalty paid on number of units of a particular product produced. 19. Road licences for delivery vehicles. 20 Amount payable to a company for broadcasting music throughout the factory 21 Donations 22 Cash disccount allowed