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OPERATING EXPENSE

An operating expense, operating expenditure, operational expense, operational expenditure orOPEX is an

ongoing cost for running a product,business, or system.[1]

Its counterpart, acapital expenditure(CAPEX), is the cost

of developing or providing non-consumable parts for the product or system. For example, the purchase of

aphotocopierinvolves CAPEX, and the annual paper,toner, power and maintenance costs represents OPEX.[2]

For

larger systems like businesses, OPEX may also include the cost of workers and facility expenses such as rent and

utilities.

Inbusiness, an operating expense is a day-to-dayexpensesuch assalesandadministration, orresearch &

development, as opposed toproduction, costs, and pricing. In short, this is themoneythe business spends in order to

turninventoryintothroughput.

On anincome statement, "operating expenses" is the sum of a business's operating expenses for a period of time,

such as a month or year.

Inthroughput accounting, thecost accountingaspect of thetheory of constraints(TOC), operating expense is

themoneyspent turninginventoryintothroughput.[3]

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 reporton its first day).

In areal estatecontext, operating expenses include costs associated with the operation and maintenance of an

income-producing property.

Operating expenses include:

accounting expenses

licensefees

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 theresidenceand from the regular

place ofemployment. It is prompted by professional or company purposes and likely does not concern the

travellers private life, or concerns it only to a small degree. Travel expenses include travel costs and fares,

accommodation expenses, and so-called additional expenses formeals. For the self-employed

(contractorsandfreelancers), the expenses constitute businessexpenses.

leasing commissions

salary and wages

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en.wikipedia.org/wiki/Research_%26_developmenthttp://en.wikipedia.org/wiki/Research_%26_developmenthttp://en.wikipedia.org/wiki/Administration_(business)http://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Expensehttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Operating_expense#cite_note-2http://en.wikipedia.org/wiki/Tonerhttp://en.wikipedia.org/wiki/Photocopierhttp://en.wikipedia.org/wiki/Capital_expenditurehttp://en.wikipedia.org/wiki/Operating_expense#cite_note-1http://en.wikipedia.org/wiki/Business

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