All costs that cannot be reasonable assigned to either marketing or production are administrative costs. Administration is responsible for ensuring that the various activities of the organization are properly integrated in accordance with the overall mission of the firm. The president of the firm, for example, is concerned with the efficiency of both marketing and production as they carry out their respective roles. Proper integration of these two functions is essential for maximizing the overall profits of a firm. Examples of administrative costs are top-executive salaries, legal fees, printing and distributing the annual report and general accounting. Research and development is also part of administrative costs, and is expensed in the period incurred. Exhibit 2-6 illustrates the various types of production and nonproduction costs.