SG&A Costs of Apple Inc.
The selling, general, and administrative (SG&A) category on a company’s income statement includes all the company’s general, administrative, and administrative (SG&A), direct and indirect selling expenses. Selling, general, and administrative (SG&A) expenses are reported on the income statement as the sum of all company’s direct and indirect selling and general and administrative (SG&A) expenses. They arise as part of day-to-day business activities. Managers refer to EMS when implementing a cost reduction strategy, as they do not directly affect the manufacture or production of goods (Tuovila, 2022).
What I’ve Learned in This Unit & How The Assignment Topic is Applicable to and Will Benefit Me
In this unit discussion, I’ve learned the main three types of manufacturing costs (direct, indirect, and overhead) and their cost behaviours (variable, fixed, or mixed) of Apple Inc. After working on this assignment, I’ve learned that by looking at Apple’s manufacturing cost categorization, we can see that it mostly consists of variable costs while the fixed cost only limited to the rent, insurance, warehouse, and administrative salary.
The written assignment helped me reflect on the comparison of the three costing methods, job order costing, process costing, and activity-based costing. I realized that each costing method has its own benefits and downfalls. Therefore, the company needs to know which is the best costing method for them.
SG&A Costs of Apple Inc and How would these costs be considered in product costing
According to Macroaxis (n.d.), the component of operating expenses that represents the total cost of ownership associated with the sale of a company’s products and services; and all other general and administrative expenses. Direct selling costs (such as credit, warranty, and advertising) are expenses that can be directly related to the sale of specific products. Indirect selling costs are costs that cannot be directly linked to the sale of specific products; for example, telephone costs; Internet; and postage. G&A includes salaries of non-commercial personnel; Rent; utilities; communication; etc. Analysis of historical Apple sales and administrative expense data is intended to quantitatively capture the general pattern of growth or decline in Apple’s financial position and how it may relate to other accounts over time.
Apple’s annual SG&A trend has remained relatively stable with very little volatility. General administration costs for the sale may exceed 16.5 billion this year. For the period 2010 to 2022, the annual regression line for Apple’s SG&A data series had a median of 15,261,000,000 and a range of 14,374,000,000. Apple’s net income is currently relatively stable compared to last year (Macroaxis, n.d.).
Based on the analysis done by Finbox (n.d.) below are the facts of the Apple SG&A:
- Apple’s SG&A expenses for the trailing twelve months are $23.67 billion.
- Apple’s SG&A expenses for the fiscal years ended September 2017 through 2021 averaged $18.42 billion.
- Apple operated with an average SG&A of $18.245 billion for fiscal years ending September 2017 through 2021.
- Apple’s SG&A expenses hit a five-year low of $15.261 billion in September 2017. Apple’s selling, general and administrative expenses increased in each of the last five fiscal years from $15.261 billion in 2017 to $21.973 billion in 2021.
Conclusion
In my opinion, the topics I’ve learned in this unit (as I mentioned in the previous paragraphs) are applicable to and will benefit me in terms of decision-making for determining the costing method for the company, analyzing what kind of manufacturing cost incurred in the company, so that the executive of the company can direct the company business direction in the right way.
As for Apple Inc, the SG&A cost is one of the most important parts of the manufacturing cost of Apple’s production activity since it has a 16.54% increase year-over-year (Macrotrends, n.d.).
References
Finbox. (n.d.). The complete toolbox for investors. The Complete Toolbox for Investors | finbox.com. Retrieved June 29, 2022, from https://finbox.com/NASDAQGS:AAPL/explorer/sga
Macroaxis. (n.d.). Apple selling general and administrative expense over last 10 years from 2010 to 2022 | NASDAQ:AAPL. Retrieved June 29, 2022, from https://www.macroaxis.com/financial-statements/AAPL/Selling-General-and-Administrative-Expense
Macrotrends. (n.d.). Apple SG&A expenses 2006–2021 | AAPL. Macrotrends | The Long Term Perspective on Markets. Retrieved June 29, 2022, from https://www.macrotrends.net/stocks/charts/AAPL/apple/selling-general-administrative-expenses
Tuovila, A. (2022, February 16). Selling, general & administrative expense (SG&A) definition. Investopedia. Retrieved June 28, 2022, from https://www.investopedia.com/terms/s/sga.asp
Note:
This article is written based on University of The People Managerial Accounting (BUS 5110) written assignment by Fristy Tania in June 2022
