Question

Non-manufacturing costs are generally classified into two categories: selling and administrative. True False

Answer 1

True.

Non manufacturing costs are those costs that are not directly linked to production. They are not required for production, but are useful in selling the product. Non manufacturing costs are generally classified into:

1. Selling and marketing costs: examples- cost of taking order, advertisement expenses, sales commission etc.
2. Adminstrative expenses: examples- salary of staff, research and development, legal expenses etc.