How to Calculate Selling Expense

by James Wiley; Updated September 26, 2017
Pencil on calculator

Running a business that involves sales of goods requires a good deal of attention to detail and organization. Records must be accurately kept in order to evaluate how the company is faring at the end of each year. Selling expenses are divided into quarter sections, and are a way of listing and adding up the totals of budgets and money spent in order to finance the company. These numbers are extremely important, as they are later compared to the total sales numbers to determine whether the company made or lost money that quarter.

Step 1

List all selling expenses that are not based on fixed rates, and may change from quarter to quarter. The most common variable is commission paid to employees, which is never constant. Add up total commission paid for each quarter to obtain the total yearly commission paid.

Step 2

List all total fixed expenses, which can include rent of the office building, bills for the building such as phone and electric, the cost of advertising the products sold, and the cost of manufacturing the products (if applicable to the company). These expenses should be listed quarter by quarter, and then added up to produce a final yearly summary.

Step 3

Add together all fixed and variable expenses, and total up all selling expenses for the year. Compare this number to total sales to evaluate how your company did for the entire year, and how it did quarter to quarter.

About the Author

James Wiley graduated from Providence College in 2009 as a double major in global studies and Spanish. Wiley's capstone thesis paper was published in the Providence College database. He has also competed in international script-writing competitions and coauthored a pilot which placed in the top 15 percent of international entries over the past year.

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