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Learning selling, general and administrative

Welcome to Professor Savings
We teach finance basics.
Hi I’m your host today Rayfil Wong

Today we are going to talk about what is selling, general and administrative expense

Now these numbers are in your income statement which we also did a video about so you gonna what the income statement jump over to that learn that as

Wow lets start off here

Jane owns a popular coffee shop around town

and selling cost are those can be linked directly to the sale of a cupcake

These expenses include marketing cost such as running an online marketing campaign on Facebook posting her new salted caramel cupcake

Jane expenses and administrative expenses can be directly linked to the sales of cupcakes said jane also sells cookies in her bakery so these costs must be incurred to make those cupcakes sales

so general and administrative cost include her bakers and other things such as staff wages and insurance, and also things like utilities, internet and phone charges

S, G and A do not include the cost of cupcake flour and sugar these expenses fall under the cost of goods sold category

so why should you care? well change shit? she knows her s g and a she compares this to publicly traded companies they are perhaps doing cupcakes and selling goods

so she could compare and see is her costs and her expenditures too high

thats why she should care, because when you compare you know whether you are spending too much on flour or too little on flour and the breakdowns there are especially for publicly traded restaurant  companies

so its good to know

so basically Jane wants her S, G and A to be as low as possible to maintain a high level of cupcakes sales

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