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31 Examples of an Operating Cost

 , July 14, 2020
Operating costs are the core expenses of an organization that are often ongoing or repeated. This includes overhead known as selling, general and administrative expenses (SG&A). Operating costs can also include cost of goods sold. This would certainly qualify as a core expense of an organization but is sometimes separated out for purposes of analysis and reporting. The following are common operating costs.
Advertising
Bad Debt Expense
Bank Charges
Cost of Goods Sold†
Depreciation
Employee Benefits
Equipment Rental
Executive Compensation
General & Administrative Expense
Insurance
Interest
Legal Fees
Licensing Fees
Management Fees
Management Salaries
Meals & Entertainment
Office Expenses
Office Supplies
Professional Fees
Promotion
Rent
Repairs & Maintenance
Salaries & Wages
Sales Commissions
Selling Expenses
Software Licenses
Taxes
Tools & Equipment††
Travel
Utilities
Vehicle Expenses

Notes

Cost of goods sold is conceptually an operating cost but may be separated out for the purposes of analysis and reporting.
†† Minor purchases of tools, equipment and computing devices that are below your capitalization limit.
Operating costs are reported as operating expenses on an income statement.
Costs of goods sold includes anything that can be directly attributed to the cost of each unit of a product or service that was actually sold. For example, some wages will be includes in costs of goods sold while others may be included in general and administrative expenses. Care must be taken to avoid counting any cost twice.
Operating costs are interpreted according to the nature of your business and will differ from one industry to the next.
Overview: Operating Cost
Type
Definition
The core expenses of an organization that are often ongoing or repeated.
Similar Terms
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