# Selling Overheads

## Definition

All indirect expenditures incurred for selling the product are known as Selling Overheads.

## Key Rule

> Selling OH are charged on the basis of NUMBER OF UNITS SOLD (not units produced).

## Examples of Selling OH

1. Advertisement, Media cost, Website, Sales/Market Research.

2. Salary of Sales Department personnel.

3. Depreciation, Maintenance of Sales Department assets.

## Position in Cost Sheet

Added after Cost of Goods Sold:

```

Cost of Goods Sold

+ General Admin OH

+ Selling OH

+ Distribution OH

+ Secondary Packaging

= Cost of Sales

```

Worked example

### Example 1

Example: Advertisement ₹50,000, salesman salary ₹30,000, market research ₹10,000 for the year. 10,000 units produced, 8,000 sold.

Selling OH = 50,000 + 30,000 + 10,000 = ₹90,000 (added to Cost of Sales regardless of production).

If the question gives Selling OH per unit, multiply by units sold.

⚠️ Common exam mistakes

Reference:

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