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Hi Mr.John
I have a question about production cost. why the commission payable to salesperson isn’t classified as a production cost . I know all indirects (overheads) are included to the production cost. The question is from the open tuition’s lectures.The production cost is the cost of actually producing/manufacturing. So it is only costs in the factory.
It does include overheads incurred in producing (in the factory) but not other costs of the business such as selling costs, administrative costs and costs of delivery to the customer.
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