Question

All of the following items are considered manufacturing costs except for: * Source: Retired ICMA CMA Exam Questions. Tires for an automobile manufacturer. Sales commissions for a car manufacturer. Plant property taxes for an ice cream maker. Cream for an ice cream maker.

Answer 1

Answer:

Sales commissions for a car manufacturer

Explanation:

Manufacturing cost are all costs incurred in the process of producing a product. They are costs of items or services directly related to making a product. Examples of these cost are factory utilities, cost of component parts for producing a product such as tires for an automobile manufacturer, tax on manufacturing equipment or building such as plant property taxes for an ice cream maker, cost of manufacturing input such as cream for an ice cream maker, factory depreciation, and among others.

However, sales commissions for a car manufacturer is not a manufacturing cost but a component of selling and distribution expenses to the car manufacturer. Selling and distribution expenses are expenses incurred in order to sell and delivered a product to the consumers, and these include advertisement expenses, salaries and commission of salesmen, cost of price list and catalogue, and others.

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