Operating Expenses

Operating Expenses refer to the costs associated with running a business’s core operations on a day-to-day basis, excluding the costs of goods sold (COGS). These expenses are necessary for the business to maintain its activities and can include rent, utilities, salaries, and office supplies.

• Examples:
  • Rent for office or retail space
  • Utilities such as electricity and water
  • Salaries and wages for employees
  • Office supplies like paper and pens
  • Marketing and advertising costs

Cases:

• A software company incurs monthly cloud service fees to host its applications.
• A retail store pays for in-store marketing materials to promote its products.
• A consulting firm pays salaries to its consultants and administrative staff.