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Target Corporation s note from a recent annual report illustrates the primary items classified in each ( TGT ) major expense category: cost of sales
Target Corporations note from a recent annual report illustrates the primary items classified in each TGT major expense category: cost of sales COS or selling, general and administrative SG&A For each expense, indicate whether the item would be included in COS or SG&A Note: Target owns the distribution centers mentioned in several of the line items.
Type of Cost Target Corporation Classification
a Advertising expenses Answer
SG&A
b Compensation and benefits costs for headquarters employees Answer
SG&A
c Compensation and benefits costs for store employees Answer
SG&A
d Compensation and benefits costs for distribution center employees Answer
COS
e Distribution center costs Answer
COS
f Freight expenses associated with moving merchandise from our vendors to our distribution centers and our retail stores Answer
COS
g Freight expenses associated with moving merchandise among our distribution and retail stores Answer
COS
h Import costs for foreignsourced inventory Answer
COS
i Inventory shrink and theft Answer
COS
j Litigation and defense costs and related insurance recovery Answer
SG&A
k Markdowns on slowmoving inventory Answer
COS
l Occupancy and operating costs for headquarters facilities Answer
SG&A
m Occupancy and operating costs of retail locations Answer
SG&A
n Outbound shipping and handling expenses associated with sales to our guests Answer
COS
o Payment term cash discounts to our vendors Answer
COS
p Preopening costs of stores and other facilities Answer
SG&A
q US credit cards servicing expenses Answer
SG&A
r Vendor reimbursement of specific, incremental, and identifiable advertising costs Answer
SG&A
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