Classify items of cost and justify the same

Classify the following items of cost and justify the same: [April – 04]
(a) Indirect wages (b) Carriage outward
(c) Depreciation of delivery vans. (d) Raw material purchased.
(e) Foreman’s wages. (f) Director’s fees.
(g) Free samples. (h) Heat light and power.
(i) Consumable stores. (j) Direct expenses.

Soln:
Cost – Traceability – Functional – Behavioural
(a) Indirect wages – Indirect Cost –  Factory cost – Fixed Cost
(b) Carriage outwards – Indirect Cost – Selling and Distribution Cost – Fixed Cost
(c) Depreciation of delivery Vans – Indirect Cost –  Selling and Distribution Cost – Fixed Cost
(d) Raw-Material Purchased Direct Cost Factory Cost Variable Cost
(e) Foreman’s Wages Indirect Cost Factory Cost Fixed Cost
(f) Director’s Fees Indirect Cost Administration Cost Fixed Cost
(g) Free Samples Indirect Cost Selling and Distribution Cost Fixed Cost
(h) Heat light and Power Indirect Cost Factory Cost Semi-Variable Cost
(i) Consumable Stores Indirect Cost Factory Cost Fixed Cost
(j) Direct Expenses Direct Cost Factory Cost Variable Cost