4/3/2023 0 Comments Fixed expenses![]() Operating costs include fixed, variable and semi-variable costs. Operating Costs: Operating costs are any expenses associated with the day-to-day maintenance and administration of a business. It's deducted from a business's total revenue to determine gross profit and can include factory overhead, storage, cost of raw materials and parts used to make a product, direct labor costs, shipping or freight in costs and indirect costs, such as distribution or sales force costs. COGS are a business expense and affect how much profit a company makes on its products. The statements are typically broken into different categories.Ĭosts of Goods Sold (COGS): Also known as cost of sales, COGS refer to the cost of manufactured or purchased goods sold. The income statement shows a picture of your company’s expenses and revenues over a given period of time. Your income statement is the main financial statement used when recording business expenses and determining your taxable income.
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