Insurance to cover sold goods while in transit
Royalty on sales
Legal cost on debt realization
Distribution of samples
Answer is Wrong!
Answer is Right!
The correct answer is C. Legal cost on debt realization.
Selling overhead is a type of indirect cost that is incurred in the selling and distribution of goods and services. It includes costs such as sales commissions, advertising, and marketing.
Legal cost on debt realization is a direct cost that is incurred in the collection of debt. It is not a selling overhead because it is not incurred in the selling and distribution of goods and services.
The other options are all selling overheads because they are incurred in the selling and distribution of goods and services.
- Insurance to cover sold goods while in transit is a cost that is incurred to protect the goods from loss or damage while they are in transit.
- Royalty on sales is a payment that is made to the owner of a patent or copyright for the use of their intellectual property.
- Distribution of samples is a cost that is incurred to give potential customers free samples of a product.