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Hi john sir..john sir help me with the followingn..
Q.1..I read a statement that a cost which is incurred to promote the sales is called selling cost..is this statement true?
Q.2..A salesman is engaged in distributing the company’s free samples in diffrnt areas..To distribute free samples company incurrs transpotation cost..is this transpotation cost is selling or distribution cost?
Q.3..Agricultural sector and mining buisiness falls under which type of business?..is it trading..manufacturing or service?
Why are you not watching the free lectures? This is all covered in one of the very early lectures (and our lectures go through the entire syllabus).
1. True
2. Distribution
3 Trading
Hi john sir..john sir i m using a vry slow intrnet connection on mobile phone due to some reason.. so thats y vry tough for me to see lectures .but soon i will get a fast conenction..whenever i watched ur lecture no doubt i enjoyed..thnx for your kind reply sir………
John sir u considered my above mentiond question num 1 true ..that cost incurred to promote sales is selling cost..in this context sir..i think we distribute things to our retailers or customers at their door step to promote the sales..in this sense above mentiond question num 2( transpotation cost to distribute free samples) should also b considerd selling cost because that is also to promote sales..
Similarly many pizza chains deliver piza free of cost to customers at their door step..this step is also to promote sales i think..then this should also b treated as selling cost..
Thanx for ur patience sir
Sorry – I missed the point you were making when I first read your question.
Firstly, for financial accounts (which is Paper F3, not F2) then we are required to show “selling and distribution costs” as one figure – we are not required to split them between selling and distribution costs separately, and so it would make no difference.
For management accounting (which is Paper F2) there are no rules at all – we do whatever we find most useful for management. Usually we are only interested in splitting between production costs and non-production costs (and obviously delivery is non-production whatever the reason).
If a question did ask you which would be the better classification, then in your example (where there was delivery of promotional goods) then I agree that calling it a selling cost would be better than calling it distribution. However they could only ask what might be better, because again (for F2) there is no rule.
Thnx thnx alot my dear sir..may u live long nd healty..one more thing sir..if we are running piza chain then delivery of piza would b most likely considered as distributiin cost?
I want to meet u one day..u r always source of inspiratiin for me..bt m not in your country..bt one day m hopeful will request to meet u
Thanks.
With regard to the pizza’s, I would rather treat it as a distribution cost.
Thnks sir..bt why distribution for piza..infct that step is also to promote sales..
Maybe – as I said before, then are no rules. However you could say the same about any sales by any business where they provide free delivery (which is very common)!
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