ICAEW BIP · Chapter 1 · Question 8 of 10
Which of the following costs of a manufacturing company would be classified by function as an administration cost?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The salary of the company's finance director
Explanation
Administration costs relate to the general management and running of the organisation, such as the finance director's salary. Sales commission and delivery costs are selling and distribution costs. Maintenance wages for production machines are production overheads.
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