What's the difference between the two? And are these fixed or variable costs?
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What's the difference between the two? And are these fixed or variable costs?
(edited)
Hi there,
This is really tricky. I'd honestly try to just think of them seperately because there's overlap in both. I also highly recommend you get googling and reading - this will take a few days for you to process.
Both SG&A and overhead generally fixed costs, not variable costs. However SG&A might directly increase/decrease with sales, depending on the industry, and therefore be variable.
Overhead = "costs required to run a business, but which cannot be directly attributed to any specific business activity, product, or service" As in, just to be open I have to pay x. This means my rent, baseline equipment, back office staff etc.
SG&A is essentially the costs of my back-office/support functions (legal, HR, finance, etc.)
"Selling, general, and administrative expenses also consist of a company's operating expenses that are not included in the direct costs of production or cost of goods sold. In other words, SG&A includes all non-production costs." This means accounting, legal, marketing, rent, etc.
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Thanks, fixed it :)