I assumed – delivery costs as outward delivery costs, which is a part of selling and distribution expenses, Hence won’t form part of COGS.
Did I assume wrong?
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THIS QUESTION IS TALKING ABOUT DELIVERY COST WHICH IS INCURRED IN PURCHASING RAW MATERIAL
Only production overheads are capitalized and others are expensed. Although your assumption can be right, if you see other options, like selling cost and storage cost, they are not a part of production overhead but would come under other operating expenses. This leaves you only with option C, where it can be both delivery costs incurred for getting the stuff in place or the delivery of items to the customers. Since other two are definitely, we are forced to assume they are talking about ‘before delivery costs’ which would be a part of production overhead. Moreover, I don’t think that PPand E which are mostly immobile and fixed assets would require a ‘delivery’ to the customer for use. Rather for them delivery costs would only be for setting them up correctly for use of the firm.