CHAPTER X 
THE DISTRIBUTION OF THE EXPENSE BURDEN 
TaE GENERAL Divisions oF EXPENSE 
There are three general groups of expenses, namely, 
(1) administrative expenses; (2) manufacturing ex- 
penses; (3) selling expenses. We should remember that 
administrative expenses are a general charge upon the 
business as a whole, while manufacturing expenses and 
selling expenses are peculiar to the two activities of pro- 
ducing and selling. Furthermore, it is desirable to dis- 
tinguish clearly between manufacturing costs and selling 
costs in order that changes either in manufacturing or 
in selling conditions may be properly registered. The 
production division should not be held accountable for 
unusual selling expenses, and vice versa. This treatise 
is not concerned with the detailed operations of selling 
expense. 
ADMINISTRATIVE EXPENSES 
Administrative expenses include organization expenses, 
such as promoter’s and legal fees. The legal fees in this 
group will exclude such as are connected with patents 
and compensation matters, which are manifestly manu- 
facturing expenses. 
Administrative expenses will include also the pay 
and expenses of directors, salaries of officers, general 
accountants, clerks in general office, depreciation of 
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