what are selling general and administrative expenses sg a 
selling general and administrative expenses sg a include all non production expenses for a reporting period examples of these expenses are marketing advertising rent and utilities this line item includes nearly all business costs that aren t directly attributable to making a product or performing a service sg a consists of the costs of managing a company and the expenses of delivering its products or services understanding selling general and administrative expenses sg a sg a plays a key role in a company s profitability and in calculating its break even point or margin targets it s also one of the first places managers look when they re reducing redundancies after mergers or acquisitions this makes it an easy target for a management team that s looking to boost profits quickly it s also the first place that private equity firms or strategic investors perform their due diligence when they re considering an investment or acquisition target selling expenses can be broken down into direct and indirect costs direct selling expenses are incurred only when the product is sold indirect selling expenses occur throughout the manufacturing process and after the product is finished these expenses are sometimes confused with the action of indirect selling which happens when third parties or affiliates sell the products g a expenses are the company s overhead they re incurred in the day to day operations of a business and may not be directly tied to any specific function or department within the company they re usually fixed costs incurred disregarding the amount of sales or production incurred during a certain period many sg a expenses are unavoidable companies are often required to carry insurance policies and to spend money to maintain their headquarters types of sg a expensesselling expenses are often related to expenses that are necessary for a company to directly interface with customers these types of expenses include general expenses are often necessary to run a business these costs would likely have to be incurred regardless of the type of product or industry that a company operates within these types of expenses include administrative expenses are primarily related to the cost of personnel these employees may be internal staff or external parties who provide services for a fee they often don t directly interface with the manufacturing or sale of goods these types of expenses include general and administrative costs are rarely reported separately it s fairly common to see these two costs reported together 