which of the following items of cost cannot be treated as a sales and distribution overhead expense within a manufacturing business?
A.cost of building insurance
B.warehouse rental for storage of raw material
my answer is A.
But the correct answer is B becouse rental cost for the raw materials warehouse are a production overhead cost .
But I think anwer A might be possible
Someone can explain to me???
The clue to B being the only correct answer is “cannot”. Since B is undoubtedly a production overhead expense it cannot be classified as sales and distribution. A could be a sales and distribution overhead expense if the building includes sales offices and/or a warehouse for the distribution of finished goods – or it could be an admin overhead if the building is a head office or includes the accounts department (for example).
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