![]() ![]() ![]() These costs don’t relate directly to selling products or services but rather to the general ongoing operation of the business. G&A expenses are the overhead costs of a business, many of which are fixed or semi-fixed. Indirect selling expenses are incurred either before or after the sale is made, and examples include salaries, benefits, and wages for salespeople, travel, and accommodation expenses. Examples of direct selling expenses include transaction costs and commissions paid on a sale. The selling component of this expense line is related to the direct and indirect costs of generating revenue (from selling products or services).ĭirect expenses are those incurred at the exact point-of-sale for a product or service. If this is the case, then gross profit less SG&A equals pre-tax profit, also known as earnings before taxes (EBT). Some firms classify both depreciation expense and interest expense under SG&A. Image Source: CFI’s Reading Financial Statements course. In an income statement, gross profit less SG&A (and depreciation expense) equals the operating profit, also known as earnings before interest and tax (EBIT). On occasion, it may also include depreciation expense, depending on what it’s related to. It includes expenses such as rent, advertising, marketing, accounting, litigation, travel, meals, management salaries, bonuses, and more. SG&A includes all non-production expenses incurred by a company in any given period. Updated FebruSelling, General & Administrative (SG&A) Expense ![]()
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