What is typically considered part of SG&A? Select the two correct answers.
factory costs
billing costs
commissions
wages payable
materials costs
The correct answers are:
1. Billing costs: This includes expenses related to invoicing and collecting payments from customers.
2. Commissions: This includes sales commissions paid to employees or agents for generating sales.
The two correct answers for what is typically considered part of SG&A (Selling, General, and Administrative) are:
1) Billing costs: This includes expenses related to generating and sending invoices, maintaining billing systems, and processing payments.
2) Commissions: These are payments made to sales personnel or agents based on their sales performance.
The other options are not typically considered part of SG&A:
- Factory costs: These are generally associated with production activities and would typically fall under the cost of goods sold (COGS) category.
- Wages payable: This refers to amounts owed to employees for their work and is usually classified under salaries or wages expense rather than SG&A.
- Materials costs: These are typically considered part of COGS as they directly relate to the cost of producing goods.