Which of the following is an example of an administrative expense?
Examples of Administrative Expenses
Supplies such as paper and software, as well as rent, utilities, insurance, marketing, professional memberships and recurring service fees are also classified as administrative expenses.
How are administrative expenses calculated?
It is calculated by dividing the reported operating profit by the sales for that period. Alternatively, start with reported revenue and subtract cost of goods sold, SG&A and other overhead costs. Divide the operating income total by reported revenue and multiply it by 100 to express as a percentage.
What is included in selling and administrative expenses?
Selling, General & Administrative (SG&A) Expense. SG&A includes all non-production expenses incurred by a company in any given period. It includes expenses such as rent, advertising, marketing, accounting, litigation, travel, meals, management salaries, bonuses, and more.
Is repairs and maintenance an administrative expense?
List of Administrative Expenses. Salaries and wages cost of employees engaged in finance, accounts, human resources, information technology division, etc. … General Repairs and maintenance cost. Finance and insurance cost.
What are the general and administrative expenses?
General and administrative expenses are costs that contribute to the overall operations of the company and can’t really be directly related back to selling or making sales. These expenses include things like overhead, management salaries, accounting fees, and other expenses used to run the business.
What is the difference between operating and administrative expenses?
The primary difference between an operating expense and an administrative expense is that types of operating expenses are related to the departments that produce products and services whereas administrative expenses are more general and not necessarily specific to a department within the company.
How can I reduce my administrative expenses?
How to Cut Administrative Expenses
- Don’t Purchase – Rent. The decision whether to own or rent property is generally based upon your scale of operations. …
- Limit Travel and Entertainment Expenses. …
- Telecommute. …
- Sublease Office and Yard. …
- Refinance Debt. …
- Eliminate Subscriptions and Memberships. …
- Cut Travel Costs. …
- Eliminate Paper.
What are administration fees?
An administrative charge is a fee charged by an insurer or other agency responsible for administering an insurance policy to cover expenses related to record-keeping and/or additional administrative costs. It is also referred to as an “administrative fee.”
Are administrative expenses Operating expenses?
Operating expenses—also called selling, general and administrative expenses (SG&A)—are the costs of running a business. … Operating expenses are categorized as indirect expenses on a company’s income statement because they do not directly contribute to the making of a product or delivery of a service.
What goes under selling expenses?
Selling expense (or sales expense) includes any costs incurred by the sales department.
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These costs typically include the following:
- Salesperson salaries and wages.
- Sales administrative staff salaries and wages.
- Commissions.
- Payroll taxes.
- Benefits.
- Travel and entertainment.
- Facility rent / showroom rent.
- Depreciation.
What are examples of selling expenses?
Selling expenses include sales commissions, advertising, promotional materials distributed, rent of the sales showroom, rent of the sales offices, salaries and fringe benefits of sales personnel, utilities and telephone usage in the sales department, etc.
Is Selling and administrative expenses a fixed cost?
Selling and administrative expenses appear on a company’s income statement, right under the cost of goods sold. … These costs may be fixed or variable; for example, sales commissions are a variable selling expense dependent on the level of sales the sales staff achieves.
Is depreciation included in administrative expenses?
Depreciation could be an administrative expense, but it can also be a selling expense, and a part of the cost of manufacturer’s products. … For example, the depreciation on the building and furnishings of a company’s central administrative staff is considered an administrative expense.
What are examples of distribution costs?
Distribution costs such as logistics, shipping and insurance costs. Marketing costs such as advertising, website maintenance and spending on social media. Selling costs such as wages, commissions and out-of-pocket expenses.