Non-manufacturing costs

Meaning

Costs outside the factory, i.e. selling, distribution, and administration. These are period costs and are not included in the cost of inventory.

Typical examples:

Selling and distribution costs

1. Sales commission for sales staff.
2. Advertising and promotion expenses.
3. Delivery/transportation of finished goods to customers.

Administrative costs

1. Office staff salaries (e.g. HR, accounts, admin).
2. Office rent, office utilities, telephone, stationery at head office.