Definition of Operating cost:
The operating cost is deducted from revenue to arrive at operating income and is reflected on a company’s income statement.
Operating costs are associated with the maintenance and administration of a business on a day-to-day basis. Operating cost is a total figure that include direct costs of goods sold (COGS) from operating expenses (which exclude direct production costs), and so includes everything from rent, payroll, and other overhead costs to raw materials and maintenance expenses. Operating costs exclude non-operating expenses related to financing such as interest, investments, or foreign currency translation.
Cost per unit of a product or service, or the annual cost incurred on a continuous process. Operating costs do not include capital outlays or the costs incurred in design and implementation phases of a new process.
How to use Operating cost in a sentence?
- The operating cost for Apple to make one of their smartphones is $199 for the 16GB version and $218 for the 64GB version.
- Operating costs can be found and analyzed by looking at a company's income statement.
- Common operating costs in addition to COGS may include rent, equipment, inventory costs, marketing, payroll, insurance, and funds allocated for research and development; and exclude non-operating costs.
- Operating costs are the ongoing expenses incurred from the normal day-to-day of running a business that include both overhead and costs of goods sold (COGS).
- Even though Johns business was online running a website and he had no other workers behind him, he still had operating cost s such as server space, bandwidth costs, and server maintenance costs which all were expensive in their own ways.
- It was my job to figure out the operating cost and that would me quite a bit of time to determine.
Meaning of Operating cost & Operating cost Definition