Assignment 1

Cost Classifications

Cost Classification by Nature:

Taxes, Insurance, Freight Inwards, PF Contribution, Bonus,

Commission, Incentives, Allowances, Overtime Pay, Packaging,
Promotion, Job Processing Charges. 

Cost Classification by Functions:

electricity, stationery, telephone expenses, rent, advertisement,

promotion, research, customer service, warehousing, delivery service,
transportation, research team, research implementation, findings
Cost, cost of materials, cost of labor, other factory expenses, and the
cost of primary packing.

Cost Classification by Behaviour:

rent, depreciation, lease, salary, Raw material, packaging, sales

commissions, wages, power consumption, maintenance cost,
management cost, supervision cost, etc.
 Assignment 2

Indicate whether the following materials are direct or indirect with reference to
the final product

(a) Oil used for lubricating machines

(b) Wire for making electric motors

(c) Bottles used for filling in a soft drink

(d) Gunny bags used for filling in sugar

(e) Ingots used by a foundry making castings

(f) Cushion seats to be fixed in a passenger car

(9) Sugarcane used for making sugar

(h) Speakers in a radio set

(i) Paper used for printing a book

(k) Nails used in a shoe

(k) Milk used for making ice-cream

State whether the following items should be classified as direct or indirect

labour:

(a) Overtime premium paid for specific jobs

(b) Wages paid to piece workers

(c) Wages paid to maintenance workers

(d) Directors' fees

(e) Salesmen's Commission

(f) Salaries paid to sweepers

A company manufactures and retails clothing. You are required to group the
costs which are listed below and numbered 1 to 20 into the following
classification: (Each cost is intended to belong to only one classification).

(a) Direct Materials

(b) Direct Labour

(c) Direct Expenses

(d) Indirect Production Overhead

(e) Selling and Distribution Costs

(f) Research and Development Costs

(g) Finance Cost

(h) Administration Costs

Items:
1. Telephone rental plus metered calls

2. Wages of security guards for factory

3. Parcels sent to customers

4. Wages of operatives in cutting department

5. Developing a new product in the laboratory

6. Wage of fork lift truck drivers who handle raw materials

7. Wages of storekeepers in materials store

 Assignment 3

Classify the following items of cost using different classification

criteria:

Items Element Function Traceability Behaviour

Free Samples
Carriage
Inward
Auditors Fees
Direct Labour
Printing &
Stationery
Repairs &
Maintenance
Rent (Factory)