Costing - Overheads
(Guest)
Is advertisement cost an indirect cost??
6 Replies
CA Rakesh Joshi
(Chartered Accountant )
(1272 Points)
Replied 21 October 2018
Yes. Advertisement is an Indirect cost.
CA Rakesh Joshi
(Chartered Accountant )
(1272 Points)
Replied 21 October 2018
Take it only for Product A. Do not apportion the cost as it specifically for Product A.
CA Rakesh Joshi
(Chartered Accountant )
(1272 Points)
Replied 21 October 2018
Please understand direct cost is cost which is directly related to production process. Since the Advertisement cost is incurred after production stage and it is not direclty related to production and hence classified as indirect cost.
If expenditure incurred only on product A is given in the question then it does not mean that the cost is a direct cost. It is just for apportionment of such cost to Product A only.
If expenditure incurred only on product A is given in the question then it does not mean that the cost is a direct cost. It is just for apportionment of such cost to Product A only.
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