Which of the following statements is true of a company's general and administrative costs (G&A)?
A)They are part of a company's production costs.
B)They exclude the expenses of operating a company.
C)They include Research and Development (R&D) expenses.
D)They help a company with high sales volume that creates cost advantage by managing its G&A across more units.

Question

Quizplus · Accepted Answer

General and administrative costs (G&A) include expenses such as management salaries, legal fees, rent, utilities, and office expenses, which do not directly contribute to the production of goods or services. They are important for a company with a high sales volume that wants to create cost advantage by managing its G&A across more units. Research and Development (R&D) expenses are typically separated from G&A and are considered part of a company's operating expenses. Therefore, option C is incorrect. Option A and B are also incorrect as G&A costs are not part of production costs and do not exclude operating expenses respectively.

Which of the Following Statements Is True of a Company's