Operating Cost

Expenses associated with administering a business on a day to day basis. Operating costs include both fixed costs and variable costs. Fixed costs, such as overhead, remain the same regardless of the number of products produced; variable costs, such as materials, can vary according to how much product is produced.

Businesses have to keep track of both operating costs and costs associated with non-operating activities, such as interest expenses on a loan. Both costs are accounted for differently in a company's books, allowing analysts to see how costs are associated with revenue-generating activities and whether or not the business can be run more efficiently.


Investment dictionary. . 2012.

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  • cost per available seat mile — noun The unit operating cost of a carrier, also known as unit cost. The cost, expressed in cents to operate each seat mile offered. Determined by dividing operating costs by ASM (available seat miles) …   Wiktionary

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