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Non-manufacturing cost - refer to those incurred outside the factory or production department.

These are costs are not needed in transforming materials into finished goods. Non-

manufacturing costs include: selling expenses and general expenses.

Selling expenses - also called Selling and Distribution Expenses. Examples include advertising

costs, salaries and commission of sales personnel, storage costs, shipping and delivery, and

customer service.

General expenses - also called General and Administrative Expenses. Examples include

executive salaries, salaries of administrative staff, accounting expenses, legal expenses, research

and development, and other costs related to general administration of the organization. (h56)

Financial statements - manufacturing account, income statement and statement of financial

position

The manufacturing account is an account in the general ledger which is used to accumulate all

the manufacturing costs of goods completed by a business during an accounting period.

For a manufacturing business the manufacturing account needs to be prepared before

completing the trading and profit and loss accounts.

Manufacturing Account Formula

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