CAS 15- Selling and Distribution OH

Question 1

Definition

Answer 1

SOH-Expenses related to sale of a product and includes all indirect expenses of sales mgmt of entity
DOH- Cost incurred in handling a product or service from the time it is ready for delivery till it reaches the customer

Question 2

Principles of measurement

Answer 2

1. Valued- cost of all resources consumed in selling and dist activities of an entity
2. Outsiders- Invoice price + taxes,duties-refunds
3. SOH- benefits-longer period- amortized
4. After sales-agreement- determined on rational basis- net of recovery for the service

Question 3

General Principle

Answer 3

1. Finance cost is not included
2. Abnormal cost is not included
3. Imputed cost is included ( only materials)
4. Depreciation- based on benefit received
5. Credit or recoveries shall be reduced
6. Subsidy, grant or incentives shall be reduced
7. Penalties ,damages, fines paid to stat auth not cost
8. Cost-standard rates- variance is part of cost

Question 4

Assignment of cost

Answer 4

1. Directly tracable assigned to relevant product sold or services rendered
2. Transportation cost - CAS 5
3. Assignment to cost object based on
   a) Cause and effect
   b) Benefits received

Question 5

Presentation

Answer 5

Selling and dist OH can be presented as a separate cost head if material

Question 6

Disclosure

Answer 6

1. Basis of distribution
2. Abnormal cost is includable
3. Penalties, damages or fines paid to stat authorities
4. Subsidy, grant, incentives recvd is reduced
5. Related party transactions
6. Forex Transactions