Classify the following on the basis of: [Oct. – 06]
(a) Functions:
(i) Salesmen’s salary
(ii) Office rent
(iii) Factory watchmans wages
(iv) Printing and stationery expense
(b) Traceability to product:
(i) Depreciation of office furniture
(ii) Cost of speakers in a radio set
(iii) Paper used for printing a book
(iv) Bottles used for filling in a soft drink
(c) Relation to change in quantity/ volume:
(i) Purchase commission at the rate of one percent.
(ii) Office rent
(iii) Cost of milk used in making ice cream
(iv) Managers salary

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Soln:
(a) (i) Selling and Distribution overheads
(ii) Office and Administration overheads
(iii) Works/ Factory overheads
(iv) Office and Administration overheads
(b) (i) Indirect Cost
(ii) Direct Cost
(iii) Direct Cost
(iv) Direct Cost
(c) (i) Variable Cost
(ii) Fixed Cost
(iii) Variable Cost
(iv) Fixed Cost

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