Do marketing and PR expenses go into Cost of sales or general overhead?

Question

What about the salespeople expense?

Answer 1

Cost of goods sold should only be direct cost. Such as material, direct labor etc. Fuel, electricity, and other utilities that are directly related to production can also be cost of good sold and not overhead because if you shut down the production line, that expense item will go away. Sometimes, we call that "variable fixed cost".

Marketing expense is marketing expense and is not overhead. Marketing expense may including advertising expense, sales and promotional expenses, Public relationship expenses, commissions,, etc. Marketing expenses is budgeted separately from overhead,These two and a few others comprises the "Variable Expenses".

Your fixed expenses are fixed regardless of whether you manufacture or sell a single unit. Overhead is one of the fixed expense item.You rent does not change, your utilities in the base operation will still be pretty much the same and so forth. A lot of smaller companies lump most fixed expenses into one large catch-all category called overhead. However others open up fixed expense to include overhead, interest expense or another items that are significant enough to be tracked separately.

Answer 2

If you are using PR as promotions and not payroll. then both would be general overhead, more specifically Administration costs rather than operating overhead.

If on the other hand you are using PR to denote PayRoll, then the payroll would be going into the cost of goods sold. This is looked at either as direct payroll or indirect. It also depends on how the payroll is listed on the financials. It will always be part of the COGS,

The rule of thumb is: if the product or services(labor) stays with the product then it would be included with the COGS.

Answer 3

def not in cost of sales
genereal over head would work
but advertising is also a good field to put it in
you can write off some or most advertising

Answer 4

general overhead