To calculate the S&A Rate, the formula is

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

Answer: (C)

The idea behind S&A Rate is to measure how much selling and administrative cost is incurred for each unit of output, which here is each placement. By dividing the total S&A expenses by the number of placements, you get the cost per placement. This makes it a per-unit efficiency metric: it shows how much is spent on S&A for every completed placement.

If you used a different denominator, like cost or revenue, you’d end up with a different kind of ratio (such as cost per unit of cost or S&A as a percentage of revenue), not the per-placement cost that this rate is designed to reflect. For example, with $200,000 in S&A expenses and 500 placements, the S&A Rate would be $400 per placement.