I agree with explaining about a time and a place for bathroom humor. I remember my kids asking why Daddy was allowed to use bad words and people on TV. I said 'they think that makes them sound like they really mean what they are saying and are trying to sound tough', but it's not polite and they shouldn't say bad words, especially not at school.

I told them it was OK for them to go into the bathroom and say bathroom words. They loved that!