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Selling overhead includes the cost incurred for promoting sales and retaining customers where as distribution overhead includes warehouse charges and product delivery charges. You might require professional help to complete the assignment on this topic because of the vast area it covers. This is why we have come up with our online service for selling and distribution overheads assignment help.
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Selling and distribution overheads
Selling expenses are the one which is incurred to promote sales and services to customers. It includes salaries, commission, traveling expenses, bad debts, showroom expenses, legal expenses, free gift, advertisement costs etc.
On the other hand, distribution expenses are the expenses incurred for storage and warehousing, packaging of goods and making the goods available for delivery to customers. It includes storage cost, warehousing cost, packing cost and cost of delivery etc.
So basically, selling overhead are the expenses incurred to promote sales and distribution overhead are the expenses incurred from receiving order to deliver the goods and services. The expenses incurred for selling and distribution overheads can be fixed or variable. For example, showroom expenses, cost of samples, warehouse rent etc may remain fixed where as commission on sales, bad debts, salaries, packing charges, delivery charges etc may vary.
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Treatment of selling and distribution overheads in accounts
All the expenses incurred are to be added to cost of product sold. As discussed, expenses are divided into fixed expenses and variable expenses and this classification is required for effective control on cost and to understand financial situation better. The selling and distribution cost vary according to the product wise and should be noted accordingly in books of accounts.
It is difficult to control selling and distribution overhead as they are mostly fixed in nature but the variable cost might be controlled through different techniques like budgetary control, standard costing, comparison with past result etc.
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