A company manufactures and retails clothing. You are required to group the costs which are listed below and numbered (1)-(20) into the following classifications (each cost is intended to belong to only one classification):
(i) Direct materials;
(ii) Direct labour;
(iii) Direct expenses;
(iv) Indirect production overhead;
(v) Research and development costs;
(vi) Selling and distribution costs;
(vii) Administration costs;
(viii) Finance costs.
1 lubricant for sewing machines;
2 Floppy disks for general office computer;
3 Maintenance contract for general office photocopying machine;
4 Telephone rental plus metered calls;
5 Interest on bank overdraft;
6 Performing Rights Society charge for music broadcast throughout the factory;
7 Market research undertaken prior to a new product launch;
8 Wages of security guards for factory;
9 Carriage on purchase of basic raw material;
10 Royalty payable on number of units of product XY produced;
11 Road fund licenses for delivery vehicles;
12 Parcels sent to customers;
13 Cost of advertising products on television;
14 Audit fees;
15 Chief accountant's salary;
16 Wages of operatives in the cutting department;
17 Cost of painting advertising slogans on delivery vans;
18 Wages of storekeepers in materials store;
19 Wages of fork lift truck drivers who handle raw materials;
20 Developing a new product in the laboratory;