wht ia da nature of the following expense:-
Sales commision to agents on the basis of units sold.
I know its a part of selling and distribution expenses but i want to know whether its a direct expense or a indirect.
Mayank kharbanda (Risk Advisory Services) (409 Points)
20 January 2010wht ia da nature of the following expense:-
Sales commision to agents on the basis of units sold.
I know its a part of selling and distribution expenses but i want to know whether its a direct expense or a indirect.
krishna kumar
(CA Final)
(407 Points)
Replied 20 January 2010
Indirect Expense....Just like trade discount.
Ca Vaneet Gupta
(43 Points)
Replied 20 January 2010
As per me it is indirect expense as sale commission is not associated with the cost of the product or bringing a item in to a saleable form.
On the basis of units Cost of goods sold = Direct materials Direct labor Factory overhead (rent, factory salaries, depreciation, leases, utilities, etc.)
Commissions generally are paid on finished goods sold and are a percentage of the sales price generally categorized on the income statement under Selling, General, and Administrative (S,G,&A) expenses.
It is an indirect expense
CA Riswa Parekh
(Practicing)
(1591 Points)
Replied 20 January 2010
Sales commision to agents on the basis of units sold is an indirect expense.
CA Parag Shukla
(Practicing Chartered Accountant)
(153 Points)
Replied 20 January 2010
Obviously Indirect Expense....
CA Neha Aggarwal
(CA )
(94 Points)
Replied 21 January 2010
Hi, since it is not related to the production of goods so it is an indirect expense.
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