Question: Is Stationery An Administrative Expense?

What are examples of administrative expenses?

Examples of general and administrative expenses are:

  • Accounting staff wages and benefits.
  • Building rent.
  • Consulting expenses.
  • Corporate management wages and benefits (such as for the chief executive officer and support staff)
  • Depreciation on office equipment.
  • Insurance.
  • Legal staff wages and benefits.
  • Office supplies.

What is considered an administrative expense?

Administrative expenses are the expenses an organization incurs not directly tied to a specific function such as manufacturing, production, or sales. Salaries of senior executives and costs associated with general services such as accounting and information technology (IT) are examples of administrative expenses.

What goes under selling and administrative expenses?

Selling, General & Administrative (SG&A) Expense. This includes expenses such as rent, advertising, marketing, accounting, litigation, travel, meals, management salaries, bonuses, and more. On occasion, it may also include depreciation expense, depending on what it’s related to. In an income statement.

Is insurance an administrative expense?

Definition of Insurance Expense

A manufacturer will report on its income statement the insurance expense incurred for its selling, general and administrative functions.

What are general administrative expenses?

In accounting, general and administrative expenses represent the necessary costs to maintain a company’s daily operations and administer its business, but these costs are not directly attributable to the production of goods and services.

Which expenses comes under administrative expenses?

General and administrative expenses pertain to operation expenses rather than to expenses that can be directly related to the production of any goods or services, including rent, utilities, insurance, and managerial salaries. On the company’s income statement, these expenses generally appear under operating expenses.

What falls under selling general and administrative expenses?

Examples of SG&A

SG&A expenses include sales commissions, advertising, promotional materials, compensation of the company’s officers as well as the marketing, sales, finance and office staffs, rent, utilities, supplies, computers, etc. provided they are outside of the manufacturing operations.

What are examples of selling expenses?

Selling expenses can include:

  1. Distribution costs such as logistics, shipping and insurance costs.
  2. Marketing costs such as advertising, website maintenance and spending on social media.
  3. Selling costs such as wages, commissions and out-of-pocket expenses.

Is Depreciation a selling or administrative expense?

For example, the depreciation on the building and furnishings of a company’s central administrative staff is considered an administrative expense. The depreciation on the sales staff’s automobiles is considered part of the company’s selling expenses.

What is added to the variable selling and administrative expenses to get the total selling and administrative expenses?

Selling and administrative expenses even include non-cash expenses such as depreciation and amortization. To calculate selling and administrative expenses, one simply needs to add up all the expenses not directly related to the production of the company’s product, including but not limited to those listed here.

What is the most common base for calculating the general and administrative G&A overhead rate?

The overhead rate allocation base most commonly used is direct labor dollars. Another common indirect rate is General and Administrative (G&A). The G&A pool consists of expenses related to the overall running of the company.

Are general and administrative expenses fixed or variable?

Fixed costs such as office rent, property taxes, computer equipment and base salaries tend to be the same no matter how much the company produces. Variable selling and administrative costs, on the other hand, fluctuate based on sales and production.

Is Bad Debts an administrative expense?

Bad debt expenses are generally classified as a sales and general administrative expense and are found on the income statement. Recognizing bad debts leads to an offsetting reduction to accounts receivable on the balance sheet—though businesses retain the right to collect funds should the circumstances change.