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Company Expense Breakdown

The document outlines general expenses involved in company operations beyond manufacturing costs. These expenses are classified as administrative expenses, distribution and marketing expenses, and research and development expenses. Schedules provide additional details on the calculation of costs for each expense category. Administrative costs are 20% of other costs. Distribution and marketing costs usually range from 2-20% of total product costs. Research and development costs pave the way for new products and methods.

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Jelain Humarang
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90 views4 pages

Company Expense Breakdown

The document outlines general expenses involved in company operations beyond manufacturing costs. These expenses are classified as administrative expenses, distribution and marketing expenses, and research and development expenses. Schedules provide additional details on the calculation of costs for each expense category. Administrative costs are 20% of other costs. Distribution and marketing costs usually range from 2-20% of total product costs. Research and development costs pave the way for new products and methods.

Uploaded by

Jelain Humarang
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

EXHIBIT DD

GENERAL EXPENSES

Other than the manufacturing costs, additional general expenses are involved in the

operations of a company. These general expenses may be classified as (1) administrative expenses,

(2) distribution and marketing expenses, and (3) research and development expenses. General

expenses may represent 15%-25% of the total product cost.

Cost (Php/kg IA) Schedule

Administrative Cost 3.506 DD-1

Distribution and Marketing 139.37 DD-2

Research and Development 63.35 DD-3

TOTAL GENERAL EXPENSES 206.226


SCHEDULE DD-1

ADMINISTRATIVE COST

Administrative costs are necessarily included for the economic analysis to be complete.

These are expenses that an organization incurs not directly tied to a specific function such as

manufacturing/production or sales. These expenses are related to the organization as a whole as

opposed to an individual department. Salaries of senior executives and costs of general services

such as accounting are examples of administrative expenses.

20% (OL+DS&CL+M&R) from Peters and Timmerhaus 5th Ed., Table 6-18, p. 274.

Php0.532 Php0.08 Php16.92


= 0.20 ( + + )
kg IA kg IA kg IA

= Php3.506/kg IA
SCHEDULE DD-2

DISTRIBUTION AND MARKETING COSTS

Distribution and marketing costs are expenses incurred in the process of selling and

distributing the finished products. These expenses vary widely for different types of plans

depending on the particular material being produced, other products sold by the company, plant

location, and company policies. These costs usually range from 2%-20% of the total product cost.

11% (Total Product Cost) from Peters and Timmerhaus 5th Ed., Table 6-18, p. 274.

TPC = Manufacturing Cost + General Expenses

TPC = (Variable Production Cost + Fixed Charges + Plant Overhead Cost)

+ [(Administrative Cost + Distribution and Marketing Cost(11% of TPC)

+ Research and Development Cost(5% og TPC)]

Manufacturing Cost + Administrative Cost


TPC =
0.84

1060.79 + 3.506
TPC =
0.84

TPC = Php1267.02

Php1267.02
= 0.11 ( )
kg IA

= Php139.37/kg IA
SCHEDULE DD-3

RESEARCH AND DEVELOPMENT

Research and development paves the way for the constant development of new methods

and products. Research and development costs include salaries and wages for all personnel directly

connected with this type of work, fixed and operating expenses for all the machinery and

equipment involved, cost for materials and supplies and consultants fee.

5% (Total Product Cost) from P&T 5th Ed., Table 6-18, p. 274.

Php 1267.02
= 0.05 ( )
kg IA

= Php63.35/kg IA

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