Reference no: EM132997004

Question - You have been hired by Vinex to fill a new position to meet the demand of rapid growth in sales. It is your responsibility to coordinate shipments of finished goods from the factory to distribution warehouses located in various parts of Vietnam so that goods will be available as orders are received from customers. The company is unsure how to classify your annual salary in the accounting book. Vinex's cost analyst says that your salary should be classified as product cost. Vinex's controller says that it should be classified as a selling expense. Vinex's president says that it doesn't matter which way your salary cost is classified.

Required -

1. Which point of view is correct? Give your explanation for this.

2. From the point of view of the reported net operating income for the year, do you agree with Vinex president's statement "it doesn't matter which way your salary cost is classified"? Give explanation for your agreement or disagreement.