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Sales commissions are direct expenses. Direct expenses are those that used to directly run a business like labor, materials products services and more. Indirect expenses are the costs of doing business and include things like rent, insurance, depreciation and more.

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Q: Are sales commissions a direct or indirect expense?
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Is sales commission a direct expense?

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A direct tax is one that is taken directly from the individual, such as income tax. Indirect taxes, such as sales tax, are collected by merchants and taken from the consumer. Indirect taxes also lead to inequalities while direct taxes do not.


Are sales commissions direct costs?

Sales commission has no relationship with manufacturing of products that’s why it is not a direct cost as direct costs are those costs which related to manufacturing of products like raw material, labor etc.


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Indirect costs are costs that are not directly accountable to a cost object (such as a particular function or product). Indirect costs may be either fixed or variable. Indirect costs include taxes. 1. Salary & Bonus 2. Rent Paid 3. Advertisement & Publicity 4. Electricity Charges 5. Traveling Expenses 6. Telephone Bill 7. Printing & Stationary 8. Postage & Telegram 9. Computer.


The difference between direct taxs and indirect taxs and give examples of each?

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Are sales commissions classified as cost of good sold?

Traditional financial/absorption accounting defines cost of goods sold as (in manufacturing): Direct materials Direct labor Factory overhead (rent, factory salaries, depreciation, leases, utilities, etc.) Cost of goods sold Commissions generally are paid on finished goods sold and are a percentage of the sales price. For example, SP = $100; commission = 5%; commission $ = $5.00. This is a selling expense and generally is categorized on the income statement under Selling, General, and Administrative (S,G,&A) expenses. Commissions therefore are not considered cost of goods sold.