sale of scrap of raw material should be deducted while calculating raw material consumed before prime cost
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dock charges should be part of prime cost- if paid for purchase of raw goods
1. DRAWING OFFICE SALARY - FACTORY OVERHEADS
EXPL : DRAWING OFFICE SALARIES ARE INTERPRITED AS SALARY PAID FOR DRAWING THE PRODUCTION CHART OR FOR THE PURPOSE OF PRODUCTION PLAN OR PRODUCTION PROCESS THAT HAS TO CARRIED OUT AND HENCE SUCH SALARY SHOULD BE RECORDED AS FACTORY OVERHEADS....
2. DOCK CHARGES - INCLUDE IN PRIME COST
EXPL :DOCK CHARGES ARE PAID FOR CLEARING THE GOODS PURCHASED AND HENCE SHOULD BE ADDED TO THE PURCHASE PRICE OF THE GOODS PURCHASED OR IT CAN BE SHOWN AS DIRECT EXPENSES....
3. SALE OF SCRAP OF R.M - DEDUCT FROM R.M PURCHASED / REDUCE THE FACTORY OVERHEADS...
EXPL : GENERALLY R M SCRAP IS GENERATED AFTER THE PRODUCTION AND HENCE IT IS ADVISIBLE TO REDUCE THE FACTORY OVERHEADS, HOWEVER IF REDUCED FROM R.M PURCHASED THEN ALSO ITS K...
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Drawing office Salary is incurrred for factory......Whether stationery or salary its factory overhead....
