ACCA Applied Knowledge · Management Accounting · Cost classification
Kestrel Ltd incurred these costs last month: factory rent $12,000; depreciation of delivery vans $3,000; sales director's salary $8,000; head office accounts staff wages $6,500; depreciation of factory machinery $4,500. What is the total of the selling and distribution costs?
Selling and distribution costs total $11,000, being the delivery van depreciation of $3,000 and the sales director's salary of $8,000. Factory rent and machinery depreciation are production costs, and the accounts staff wages are administration costs.
- A$11,000Correct
- B$14,500
- C$3,000
- D$17,500
Explanation
Selling and distribution costs are the delivery van depreciation $3,000 plus the sales director's salary $8,000, giving $11,000. The $14,500 option wrongly adds the head office accounts wages, which are administration costs.
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