Selling, General & Administrative Expenses

Allowable or Unallowable: Allowable

Source: Category:Cost Accounting Standards (CAS)

Selling, General & Administrative Expenses (SG&A)

SG&A Expenses are expenses that are directly attributable to a single product, job or final cost objective, but are attributable to many cost objectives. As such, they are pooled together, and allocated to the relevant cost objectives. Cost Accounting Standard (CAS) 410; CAS 410 - Allocation of Business Unit General & Administrative Expenses to Final Cost Objectives establishes the methodology that is required for CAS covered contracts. Whether or not your company is CAS covered, your company should still follow the approved methodologies that are established within this standard.

There are three general categories of costs within the SG&A acronym. They are:

• Selling: Costs that are attributable and related to the selling of products or services. In U.S. Govt Contracting, some selling costs are unallowable. For the allowability of selling costs, please see; Selling Costs.

• General: Costs that are general operating expenses, not attributable to contracts, but benefit the corporation as a whole.

• Administrative: Costs that capture the leadership and executives of a company, and administration costs of the company. These costs also do not benefit a single line of products or servies, but benefit the corporation as a whole.

OF NOTE:

You will notice under CAS 410, the "S" is left out. Generally, for government contractors, selling may or may not be an allowable costs. Therefore, the pool and term used in U.S. Government Contracting is General and Administrative. To the extent that selling expenses are considered allowable costs they are included in the G&A pool, and fall under the categorization "General" costs. considered general costs. Also see; General and Administrative (G&A) Expense