If S&A Expense is 200,000 and Placement is 2,000,000, what is the S&A Rate?

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Multiple Choice

If S&A Expense is 200,000 and Placement is 2,000,000, what is the S&A Rate?

Explanation:
S&A rate measures how much of each unit of placement revenue is consumed by selling and administrative expenses. It’s found by dividing the S&A expense by the placement amount. So, 200,000 divided by 2,000,000 equals 0.10, or 10%. This means S&A costs are 10% of placement revenue; in other words, for every dollar of placement, about ten cents goes to S&A. Verifying it, 2,000,000 × 10% = 200,000.

S&A rate measures how much of each unit of placement revenue is consumed by selling and administrative expenses. It’s found by dividing the S&A expense by the placement amount. So, 200,000 divided by 2,000,000 equals 0.10, or 10%.

This means S&A costs are 10% of placement revenue; in other words, for every dollar of placement, about ten cents goes to S&A. Verifying it, 2,000,000 × 10% = 200,000.

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