Asked by Denia Drake on May 20, 2024
Verified
Nonmanufacturing costs are generally classified into two categories: selling and administrative.
Nonmanufacturing Costs
Expenses that are not directly related to the production of goods, including selling, general, and administrative expenses.
Selling
The process or act of promoting and distributing products or services to customers.
Administrative
Pertaining to the activities related to the management and general operations of an organization, often including tasks like planning, organizing, and controlling.
- Understand the distinction between direct and indirect costs, including examples of each.
- Comprehend the grouping of costs as either period or product costs and their impact on financial reports.
Verified Answer
KE
Kylie EllisMay 23, 2024
Final Answer :
True
Explanation :
Nonmanufacturing costs are indeed classified into two categories: selling and administrative. Selling costs include expenses related to promoting and marketing products or services, such as advertising and sales commissions. Administrative costs pertain to overhead expenses associated with the management and administration of the business, such as salaries of executives, legal fees, and office rent.
Learning Objectives
- Understand the distinction between direct and indirect costs, including examples of each.
- Comprehend the grouping of costs as either period or product costs and their impact on financial reports.