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.

Suppose that a major city’s main thoroughfare, which is also an interstate highway, will be completely closed to traffic for two years, from january 2014 to december 2015, for reconstruction at a cost of $535 million. if the construction company were to keep the highway open for traffic during construction, the highway reconstruction project would take much longer and be more expensive. suppose that construction would take four years if the highway were kept open, at a total cost of $800 million. the state department of transportation had to make its decision in 2014, one year before the start of construction (so that the first payment was one year away). so the department of transportation had the following choices: (i) close the highway during construction, at an annual cost of $267.5 million per year for two years. (ii) keep the highway open during construction, at an annual cost of $200 million per year for four years. now suppose the interest rate is 80%. calculate the present value of the costs incurred under each plan.