What is the meaning / definition of in the industry?

Operating Costs, also known as Cost of Goods Sold (COGS), is a cost which is directly related to everything needed to keep a business up and running.

Examples for Operating Costs include items such as payroll, rent, office supplies, utilities, , insurance, accounting, legal fees and taxes. Calculating Operating Costs requires only that you add up the expenses that your annual and your variable costs. To reduce Operating Costs many businesses increase their outsourced or become more eco-friendly (lower electricity bills, no paper, etc.).

Formula:

Operating Costs = Costs of Goods Sold + Operating Expenses

See Also:

  • COGS – Cost of Goods Sold
  • Fixed Costs
  • Variable Costs

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