Distribution indirect costs (Distribution overheads)

Distribution indirect costs (distribution overheads) costs that are incurred to be able to deliver the product to customer. Together with administrative and selling overheads they form non-production indirect costs (non-production overheads).

Distribution overheads include for example:

• wages of distribution staff
• rent, depreciation or insurance of warehouses
• packaging necessary for the transport to the customer and transport itself

Distribution overheads are in most accounting systems (or even in all?) treated as period costs and booked immediately to profit & loss statement.

This is also the case under IAS 2 – Inventory.