[ralnraln]

What are some cost of service examples compared to other expenses such as Operating Expenses?

I am having an issue ( a reoccurring one ) Say for example I sell advertisements and I have a direct sales force their salary and their over head which includes flyers, cell phone, travel, etc are all costs to include - but where? I also have general costs such as admin salary, office rent expenses etc where does this go? Into operating expenses?

Now here is the link When I calculate a CoGs ( Do I even have one? Or is it just Cost of Service if I am only offering advertisements - say for this example ) When I calculate CoGs/Sales/CoService am I calculating just the salaries and related expenses of the sales force and there required overhead into the Cost of Service/Sales/CoGs and then later subtracting Operating Expenses ( which include my admin salaries, rent, office equipment, consulting, internet, phone etc) from my Revenues?

[Just Looking]

Since you are dealing with services, not goods, it is called either the Cost of Sales or Cost of Services Rendered. These costs should be the items that are directly related to the jobs that generate revenue. They would include the staffs' wages, benefits, travel expenses for the staff, etc. Think of it as the cost to provide services for a specific job/service.

On the other hand, you'll also have overhead. These would be items such as wages for the people in the office (as opposed to the wages paid to the staff selling the advertisements), rent for your offices, utilities for your offices, depreciaton, etc. In other words, this would be the general expenses of running your business.

Some expenses will depend on your business. They could belong in both places depending on the reason the money was spent. An example in many businesses is advertising - you could place an ad in the paper that relates to a specific job (direct cost) or one that relates to your business in general (overhead item).

[ralnraln]

Thank You 'Just Looking' Anyone else care to jump in?