SGA

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  • #3045834
    Tim
    Guest

    Hi guys,

    Does any one know if there is a comprehensive list of cost to be included in SGA expense? Preferably one that has been approved by an authoritative accounting source. Additionally can any one explain to me why officer’s salaries is often included in SGA? I’ve never understood how it is not a separate line item / payroll exp.

    Thank you!

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  • #3046293
    Michael
    Participant

    dont think of whats inside SGA, rather think of whats not in cost of goods sold… This mixes cost accounting in BEC with FAR. Direct labor Direct materials and some direct OVH go into cogs and you expense them all at one time as cogs when you sell inventory. This method exemplifies the matching principle as you are matching the costs you can directly identify with the benefit in the same time period ( when you sell it). Anything that doesnt go here goes to SGA… Such as, advertising expenses, indirect OVH like labor of people in office buildings and not on the factory line, etc.

    I can further expand and explain differently if that doesnt make sense

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