While Calculating Cost of Production should i consider bank charges and advertisement. if yes then how?? plz advice
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Quick Summary
This discussion explores whether bank charges and advertisement costs should be included in the cost sheet for calculating the cost of production. Generally, bank charges related to administration can be included as overheads, while advertisement costs are considered selling and distribution overheads, forming part of the cost of sales rather than the cost of production. Other related queries about office superintendent salaries and legal expenses are also touched upon.
Advertisement cost is added after cost of production. So it forms a part of selling and distribution overhead. It is always apportioned on the basis of sales hence forms part of cost of sales. Bank charges is an overhead but forms finance cost. So an indirect overhead of administration overhead.