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P2_ Direct Product Profitability

Forums › Ask CIMA Tutor Forums › Ask CIMA P2 Tutor Forums › P2_ Direct Product Profitability

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by Cath.
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  • May 20, 2018 at 9:32 pm #453044
    simphiwe26
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    Why would salary for senior management not included in the cost considered in calculating product profitability?

    I am of the understating that we include any indirect costs

    Thanks
    Simphiwe

    May 30, 2018 at 2:22 am #454731
    Cath
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    • ☆☆☆

    Hi
    Not quite…
    In direct product profitability we need to include all the direct product costs…

    Warehouse Costs + Transport Costs + Store Costs = Direct Product Costs

    Senior management is too vague to be a direct product cost.

    Hope that helps
    Cath

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