The S&A Rate is calculated as S&A Expense divided by Placement. Which option restates this correctly?

• A. S&A Expense/Placement
• B. S&A Rate/Placement
• C. S&A Expense/Cost
• D. S&A Expense/Revenue

Answer: (A)

This question tests turning total expense into a per-unit metric. The S&A Rate is meant to show how much Selling & Administrative spend is incurred for each placement, so you divide the total S&A Expense by the number of Placements. That makes the result a dollars-per-placement figure, which is exactly what the ratio S&A Expense/Placement expresses. The other forms mix up either the numerator or the denominator, which would change the meaning: using the rate in the numerator would imply dividing by placement again, yielding an incorrect unit; using Cost or Revenue in the denominator would compute a different per-unit measure (cost per unit of cost or per unit of revenue) rather than per placement.