Q2:

A company manufactures and retails clothing.You are required to group costs which are listed below and numbered 1 to 20 in the following classifications (each cost is intendedto belong to only one classification).

i)Direct material

ii)Direct labor

iii)Direct expenses

iv)FOH

v)Research and development costs

vi)Selling and development costs

vii)Administration costs

viii) Finance costs

1.Lubricant for sewing machines

2.Floppy disks for general office computer

3.Maintenance contract for general office photocopy machines

4.Telephone rental plus metered calls

5.Interest on bank overdraft

6.Performing Rights Society charge for music broadcast throughout the factory

7.Market research undertaken prior to a new launch

8.Wages of security guards for factory

9.Carriage on purchase of basic raw material

10.Royalty payable on production of XYZ

11.Road licenses for delivery vehicles

12.Parcels sent to customers

13.Cost of advertising products on television

14.Audit fee

15.Chief accountants salary

16.Wages of operatives in the cutting department

17.Cost of painting advertising slogans on delivery vans

18.Wages of storekeepers in a material store

19.Wages of fork lift drivers who handle raw materials

20.Developing a new product in the laboratory.