Elements of non - manufacturing costs, Cost Accounting

Elements of Non - Manufacturing costs

Non-Manufacturing costs are costs incurred via all activities such support the production of services and goods. They are selling costs and administration costs, distribution costs.  These are explained as given as:

a) Administrative costs: Is the sum of costs related along with the overall management of the enterprise that cannot be readily identified along with one of the major functional areas as like an example of salary of the factory manager would be seen like a production cost but the personnel officer's salary will be viewed like administrative cost as the personnel function does work for all other functions of the enterprise.

b) Selling Costs: Is the sum of costs related along with the securing of orders from customers? Involved in this area will be items like the salaries paid to the expenditure and salesmen on advertising.

c) Distribution costs: Is the sum of costs related along with warehousing the products and their delivery to customer? The cost of wooden pallets on that products are stacked for delivery to customers and the cost of delivery whether by using the company's own vehicles or outside haulage firm are examples of distribution costs.

d) Finance Costs: These are costs incurred to secure funds to finance the organization's activities. These involve interests on loans and dividends, overdrafts to shareholders, interests on debentures.

e) Development or Research Costs: These are costs such are incurred to invent new products or to modify the existing ones, like costs incurred to get more information on those products.

Posted Date: 2/5/2013 2:56:11 AM | Location : United States







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