Sales commission is a Cost of sales. But the salary of a sales agent is an expense.
Yes, period costs are non manufacturing costs
no it is not deirect expenses
Commission expense refers to the costs incurred by a business when it pays commissions to sales agents or brokers for facilitating sales or transactions. This expense is typically calculated as a percentage of the sales generated and is recorded in the income statement as a selling expense. Commission expenses are essential for incentivizing sales personnel and can significantly impact a company's profitability. Properly managing these expenses is crucial for maintaining healthy margins.
Sales Commission varies with volume of sales that's why it is a variable cost as much the sales as much the sales commission, high sales high sales commission and vice versa.
Sales commission is a variable cost because the amount of the account is subject to variation. Think about it: A used car salesman is paid a commission say of $500 for every car he sells for the month of October. If he sells only 2 cars, then the sales commission is $1000, If he sells a whopping 12 cars, then the sales commission is $6000!! Notice the variation in commission?? This is why it is a variable cost - because it is not a fixed cost, which you know regardless of what happens during the period.!
Yes, period costs are non manufacturing costs
If sales commission is payable in future time then it is current liability but if it is paid already then it is expense.
no it is not deirect expenses
If amount of sales commission is fixed and not base on number of units sold then it is fixed expense and vice versa.
Commission expense refers to the costs incurred by a business when it pays commissions to sales agents or brokers for facilitating sales or transactions. This expense is typically calculated as a percentage of the sales generated and is recorded in the income statement as a selling expense. Commission expenses are essential for incentivizing sales personnel and can significantly impact a company's profitability. Properly managing these expenses is crucial for maintaining healthy margins.
Sales Commission varies with volume of sales that's why it is a variable cost as much the sales as much the sales commission, high sales high sales commission and vice versa.
No -- commission is Sales overhead cost.
Sales Commission varies with volume of sales that's why it is a variable cost as much the sales as much the sales commission, high sales high sales commission and vice versa.
Accounts found on an Income Statement are : Cost of Sales, Sales Rev., Selling Expense and Wage Expense
Sales commission is a variable cost because the amount of the account is subject to variation. Think about it: A used car salesman is paid a commission say of $500 for every car he sells for the month of October. If he sells only 2 cars, then the sales commission is $1000, If he sells a whopping 12 cars, then the sales commission is $6000!! Notice the variation in commission?? This is why it is a variable cost - because it is not a fixed cost, which you know regardless of what happens during the period.!
A selling expense is an expenditure made in support of the sales effort. This might include advertising, cost of transportation for sales personnel, printing of sales and technical brochures, etc.
Cost of sales (or cost of goods sold) refers specifically to the direct costs associated with producing or purchasing the goods that a company sells during a period. While it is a type of expense, it is distinct from other operating expenses, such as selling, general, and administrative costs. Therefore, while all cost of sales are expenses, not all expenses are classified as cost of sales.