SELLING AND DISTRIBUTION OVERHEADS

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....elling and Distribution Overheads, for determination of the cost of sales of product or service, and the presentation and disclosure in cost statements. 2. Objective The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Selling and Distribution Overheads with reasonable accuracy. 3. Scope This standard should be applied to cost statements, which require classification, measurement, assignment, presentation and disclosure of Selling and Distribution Overheads including those requiring attestation. 4. Definitions The following terms are being used in this standard with the meaning specified. 4.1 Abnormal cost: An unusual or atypical cost whose occurrence is usually irregu....

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....ation, such expenses for installation are part of cost of production and not considered as cost of Selling and Distribution Overheads. 4.8 Selling Overheads : Selling Overheads, also known as Selling Costs, are the expenses related to sale of products and include all Indirect Expenses in sales management for the organization.6 For Example: 1. Salaries of sales personnel 2. Travelling expenses of sales personnel 3. Commission to sales agents 4. Sales and brand promotion expenses including advertisement, publicity, sponsorships, endorsements and similar other expenses. 5. Receivable Collection costs 6. After sales service costs 7. Warranty costs 4.9 Marketing Overheads : Marketing Overheads comprises Selling Overheads and Distributi....

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.... of the Selling and Distribution Overhead. 5.8 Penalties and damages paid to statutory authorities or other third parties shall not form part of the Selling and Distribution Overheads. 5.9 Credits/recoveries relating to the Selling and Distribution Overheads including those rendered without any consideration, material and quantifiable, shall be deducted to arrive at the net Selling and Distribution Overheads. 5.10 Any change in the cost accounting principles applied for the measurement of the Selling and Distribution Overheads shall be made only if it is required by law or for compliance with the requirements of a cost accounting standard or a change would result in a more appropriate preparation or presentation of cost statements of an ....