EXERCISE 2-13 (15 MINUTES)

1. The controller is correct in his viewpoint that the salary cost should be

classified as a selling (marketing) cost. The duties described in the prob-

lem have nothing to do with manufacturing a product, but rather deal

with moving finished units from the factory to distribution warehouses.

Selling costs include all costs necessary to secure customer orders and

to get the finished product into the hands of customers. Coordination of

shipments of finished units from the factory to distribution warehouses

falls in this category.