"Transportation expenses incurred for sales" whether Direct or indirect expenses???
3 Replies
Rushabh
(CA)
(57 Points)
Replied 13 June 2012
Expenses incurred till the goods reach their present location and condition should be included in the cost of inventory..( Para 11 of AS-2)
Thus in simple terms all the expenses incurred for bringing the inventory in present form are to be treated as direct costs.
All the other expenses are treated as indirect costs. Thus selling expense is an indirect expense.
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 13 June 2012
Expenses incurred in relation to manufacture of goods are to be treated as direct expense. After sales exp are to be treated as indirect exp.
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