Question

Credit and collection cost is an item of __________.

• A. Selling overhead.
• B. Office overhead.
• C. Prime cost.
• D. Administrative overhead.

Answer 1

Answer: (A)

Selling overhead.

Credit and collection cost is that cost which is incurred for collection of debts. This may include hiring cost of a collection agency who will collect the money from debtors. This is an item of selling overheads.