Operating Costs
From bib. source
These are the costs involved in running the business.
Another way of looking at operating costs is as the necessary conditions for the stock and its sale. This is apparent a few things that typically count as operating costs are enumerated (Kind 1999, 33):
From bib. source
[…] they include distribution and selling costs, staff costs, depreciation, advertising and promotion, research and development, legal fees and the remuneration of auditors.
Mathematically speaking, subtracting operating costs from gross profit gets you operating profits (Kind 1999, 34).
Gross profit minus operating costs equal operating profits
Let gross profit be , operating costs be , and operating profits be :
math mathematics sales mathematical_operator mathematical_operators operating_costs gross_profit profit necessary_condition subtraction difference subtraction_operator subtraction_operators finance accounting profit_and_loss_account profit_and_loss_statement
bibliography
- “The Profit and Loss Account in More Detail.” In Accounting and Finance for Managers, 25–37. The Fast Track MBA Series. Dover, NH: PriceWaterhouseCoopers, 1999.