Selling, General, and Administrative (SG&A) Expenses

Selling, General, and Administrative (SG&A) Expenses

SG&A expenses refer to the costs incurred by a company to sell its products and manage its operations, excluding the costs of goods sold (COGS). These expenses include various overhead costs related to sales and management activities.

Components of SG&A

• Selling Expenses: Costs directly associated with the sale of products, such as sales commissions, advertising, and promotional expenses.
• General Expenses: Overhead costs necessary for running the company, including utilities, office supplies, and salaries of administrative staff.
• Administrative Expenses: Costs related to the management of the organization, such as salaries of executives, legal fees, and accounting services.

Examples

• A company spends $10,000 on a Marketing campaign to promote a new product.
• Salaries of the sales team totaling $150,000 for the year.
• Office rent of $20,000 per year for the corporate headquarters.

Cases

• Retail Company: A clothing retailer incurs $50,000 in advertising expenses, $30,000 in store management salaries, and $10,000 in utilities.
• Tech Startup: A tech firm spends $40,000 on sales commissions, $25,000 on legal fees, and $15,000 on administrative salaries.