The non-manufacturing overheads consist of administrative and selling and distribution costs. The administrative costs are incurred for policy formulation, direction, organisation and control of operations of an organisation. Their special features are that their amount is relatively small, fixation of standards for them is difficult and their absorption in product costing is arbitrary. There are three methods of accounting of administrative overheads: (1) transfer to costing profit and loss account, (ii) apportionment to manufacturing, selling and distribution functions, and (iii) addition as a separate item of cost. Though the introduction and operation of a control system is both difficult as well as not very useful, the normal methods of controlling cost, namely, comparison with past record, budgeting control and standard costing, may with suitable adjustments, be applied to such cost as well. Although the selling and distribution functions are separate but as after-production costs, there is overlapping between the two. These are, therefore, dealt with together for costing and control purposes. The selling overheads are incurred for selling to existing customers/retaining customers and for promoting sales to potential customers. The distribution overheads begin when an order is obtained and generally ends when goods are despatched. The accounting of selling and distribution overheads involves three-stage analysis: (i) by nature, (ii) by function, and (iii) by product. The control of such costs is comparatively dif- ficult due to their special nature. An important factor in their control is sales analysis. Sales may be analysed in a number of ways and according to market segments. The methods of analysis are: - By salesmen - By territories j2 By product - By customer By distribution channel - By size of order - By period. P.11.1 A company is producing three types of products A, B and C. The sales territory of the company is divided into three areas X, Y and Z. The estimated sales for the year are as under: Territories Product z 25,00,000 12,00,000 B 3,00,000 28,00,000 7,00,000 4,00,000 Budgeted advertising cost is as under: Territories Product z Total Local cost 232,000 345,000 342,000 21,19,000 Common cost 58,000 You are required to prepare the statement showing cost (per cent on sales) for each product and territory