ACCA Applied Knowledge · Management Accounting · Cost classification
Which of the following is a distribution cost rather than a selling cost?
Delivery vehicle running costs are distribution costs because they arise in getting finished goods to customers. Telesales salaries, advertising and the sales manager's car expenses are incurred to win orders, so they are classified as selling costs.
- ARunning costs of delivery vehicles taking goods to customersCorrect
- BSalaries of the telesales team
- CCost of a television advertising campaign
- DSales manager's company car expenses
Explanation
Distribution costs relate to warehousing and delivering finished goods to customers, so delivery vehicle running costs qualify. Telesales salaries, advertising and the sales manager's car expenses are incurred in obtaining orders, so they are selling costs.
Did you get it right without looking?
One question tells you little. A timed set on Cost classification shows your real accuracy, how long you take and where you lose marks.
More Cost classification questions
- Which of the following best describes a controllable cost?
- Which of the following best describes a step cost?
- A semi-variable cost was $14,000 when 2,000 units were produced and $19,000 when 3,000 units were produced. Using the high-low method, what …
- A furniture maker buys timber that becomes part of the tables it produces. Which classification of cost element best describes the timber?
- A manufacturing company uses a coding system in which each cost is given a code such as 3-210-45, where the first digit shows the cost type,…
- Kestrel Ltd incurred these costs last month: factory rent $12,000; depreciation of delivery vans $3,000; sales director's salary $8,000; hea…