In
business, an operating expense is a day-to-day
expense such as
sales and
administration, or
research & development, as opposed to
production. In short, this is the
money the business spends in order to turn
inventory into
throughput. On an
income statement, "operating expenses" is the sum of a business's operating expenses for a period of time, such as a month or year. In
throughput accounting, the
cost accounting aspect of the
theory of constraints (TOC), operating expense is the
money spent turning
inventory into
throughput. In TOC, operating expense is limited to costs that vary strictly with the quantity produced, like raw materials and purchased components. Everything else is a
fixed cost, including labour (unless there is a regular and significant chance that workers will not work a full-time week when they report on their first day). In a
real estate context, operating expenses include costs associated with the operation and maintenance of an income-producing property. Operating expenses include: • salary and wages • accounting expenses •
license fees • maintenance and repairs, such as snow removal, trash removal, janitorial service, pest control, and lawn care • advertising • office expenses • supplies • attorney fees and legal fees • utilities, such as telephone • insurance • property management, including a resident manager • property taxes • travel and vehicle expenses :
Travel expenses are defined as those incurred in the event of travel required for professional purposes. ::For this purpose, “travel” is defined as the simultaneous absence from the
residence and from the regular place of
employment. It is prompted by professional or company purposes and likely does not concern the traveler’s private life, or concerns it only to a small degree. Travel expenses include travel costs and fares, accommodation expenses, and so-called additional expenses for
meals. • leasing commissions ==See also==