SG&A will appear as operating expenses on the income statement for the period in which the expenses occurred. Hence, SG&A expenses are said to period costs as opposed to product costs. This means that SG&A expenses are not assigned to the cost of goods sold or to the goods in inventory.
Examples of SG&A include sales commissions, advertising, promotional materials, compensation of the company's officers as well as the marketing, sales, finance and office staffs, the rent, utilities, supplies, computers, etc. that are outside of the manufacturing function. (SG&A will not include interest expense since interest expense is reported as a nonoperating expense.)
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