What is a selling expenses budget?
The selling expense budget is the responsibility of the sales department. The budget includes selling expenses such as sales salaries, sales commissions, advertising, sales office rent, shipping expenses, sale supplies, and others. Selling expenses may be both fixed and variable.
What is included in an expense budget?
Expenses are mostly comprised of Operating Expenses, like rent, utilities, advertising and payroll. Direct costs are another type of spending: what you spend on the goods and services you sell.
How do you calculate budgeted selling expenses?
The selling and administrative expense budget lists all Operating Expenses incurred in selling and managing the business. The Operating Expenses are figured using the cost-volume (Flexible Budget) formula: y = a + bx, where a is the fixed monthly cost, x is the volume of sales, and b is a coefficient.
What is the difference between selling and operating expenses?
Cost of goods sold typically is listed as a separate line item on an income statement, while Operating Expenses represent additional costs that have not been included in cost of goods sold.
Is sales commission a selling or administrative expense?
Most sales commissions are treated as selling expenses and should be reported on the income statement as part of Operating Expenses. They usually appear under the selling, general, and administrative expenses category (SG&A).