Accounting of selling and distribution overheads

The collection and
accumulation of each expense is made by means of appropriate standing order numbers
in the usual way. Where it is decided to apportion a part of the administrative overhead to
the selling division the same should also be collected through appropriate standing order
numbers.
As in the case of administrative overheads, it is not easy to determine an entirely
satisfactory basis for computing the overhead rate for absorbing selling overheads. The
bases usually adopted are : (a) Sales value of goods; (b) Cost of goods sold; (c) Gross
Profit on sales; and (d) Number of orders or units sold.